What’s Driving General Liability and Umbrella Insurance Rates – and What Businesses Can Do About It

If your general liability or umbrella insurance costs continue to increase, you’re not alone. While some areas of the insurance market have begun to stabilize, liability coverage remains challenging – particularly umbrella. 

Industry data shows that both general liability and umbrella rates continued to rise through the second quarter of 2026, although the pace of those increases has begun to moderate. General liability renewal rates increased 5.44% in Q2 2026, while umbrella increased 7.96%.¹ 

Several factors are contributing to that continued pressure, but many point back to the same underlying issue: liability claims are becoming more expensive. 

Businesses can’t control broader litigation trends or jury awards. But understanding what’s driving the market, and where your organization can reduce its own liability exposure, can help you make more informed decisions and put your business in a stronger position with insurance carriers. 

Why liability coverage remains challenging

General liability has experienced sustained underwriting pressure in recent years. In 2024, the line recorded a 120% combined ratio – meaning insurers paid approximately $1.20 in claims and expenses for every $1.00 collected in premium.² General liability remained above a 100% combined ratio in 2025, indicating that the line continued to operate at an underwriting loss.³ 

For insurers, those results create pressure to bring premiums more closely in line with the cost of claims. And increasingly, it’s the severity of liability claims – rather than simply how often they occur- that is driving concern.

Liability claims are becoming more expensive

One of the most significant contributors to increasing claim severity is social inflation, or growth in insurance claim costs beyond what can be explained by ordinary economic inflation. 

A number of factors contribute to social inflation, including increasingly large jury awards, changing attitudes toward corporations, increased attorney involvement, litigation funding and changes to the legal environment.⁴ 

The size of jury awards illustrates the challenge. Median jury awards increased 23% in 2025 to $4.9 million – more than double their 2019 level.⁵ At the highest end of the spectrum, so-called “nuclear verdicts” exceeding $10 million have also become more frequent and more costly.⁶ 

For businesses, this means a liability claim that may once have remained comfortably within primary insurance limits has a greater chance of reaching, or exceeding, those limits today. 

Why umbrella coverage feels the pressure even more

Umbrella insurance is designed to provide additional liability protection when a claim exceeds the limits of an underlying policy, such as general liability or commercial auto. 

As the severity of large liability claims increases, umbrella and excess insurers are more likely to be called upon to pay. 

That helps explain why umbrella rates have remained under greater pressure than many other commercial insurance lines. Insurers have also become more selective about the amount of umbrella and excess capacity they’re willing to provide, which can lead to higher attachment points or more complex structures involving multiple insurers and layers of coverage.⁷ 

For organizations with significant liability exposures, the issue isn’t simply what umbrella coverage costs. It’s also whether the limits and structure of the insurance program remain appropriate for the potential severity of a loss.

Older claims are costing more than expected

Liability claims can take years to resolve. That creates another challenge for insurers: a claim may ultimately cost significantly more than originally anticipated. 

In 2025, the insurance industry’s “other liability–occurrence” category,  which includes exposures associated with general liability, umbrella and excess coverage, experienced another $7.3 billion in adverse reserve development.⁸ In simple terms, insurers determined that money previously set aside for older claims wasn’t going to be enough. 

When carriers repeatedly find that past claims cost more than expected, those results influence how they evaluate and price future risk.

New liability exposures continue to emerge

Businesses and insurers are also navigating liability exposures that may not have been fully understood years ago. 

One example is PFAS, a group of widely used chemicals sometimes referred to as “forever chemicals.” Litigation involving PFAS has expanded across numerous industries, with thousands of lawsuits filed and billions of dollars in settlements to date.⁹ 

PFAS won’t be a meaningful exposure for every organization, and emerging liability risks will vary significantly by industry. But the broader issue is relevant to all businesses: liability can develop over long periods of time, and today’s activities can potentially create claims years into the future. 

What can your business do?

Your organization can’t control jury awards, litigation trends or how insurers respond to the broader liability market. 

You can influence the risks within your own operation. 

Strong liability risk management starts with understanding where your organization could cause injury, property damage or other harm – and putting consistent practices in place to reduce those exposures. 

Depending on your operations, that can include:

• Maintaining documented safety policies and procedures 
• Providing appropriate employee training and reinforcing expectations 
• Regularly inspecting facilities, equipment and work areas for potential hazards 
• Documenting inspections, corrective actions and other risk management efforts 
• Establishing clear incident-reporting procedures and investigating incidents promptly 
• Reporting potential claims to your insurance team in a timely manner 
• Reviewing contracts to understand how liability is being allocated between parties 
• Establishing appropriate insurance requirements for subcontractors, vendors and other business partners 
• Reviewing loss trends and near misses for opportunities to prevent future incidents 
• Periodically evaluating whether your liability limits remain appropriate for your operations and exposures 

Not every practice will apply to every organization. The goal is to understand your most significant liability exposures and demonstrate that they are being actively managed. 

Focus on the risk, not just the rate 

When general liability and umbrella premiums increase, it’s natural to focus on the cost of the insurance itself. But premium is only one part of your organization’s total cost of risk. 

A serious liability claim can affect far more than an insurance renewal. It can disrupt operations, damage relationships and reputation, consume leadership time, and potentially expose the organization to costs beyond its insurance limits. 

Risk management isn’t a guarantee of lower premiums or favorable renewal terms. It can, however, help prevent losses, reduce their severity when they do occur, and demonstrate to insurance carriers that your organization takes its liability exposures seriously. 

At Morris & Garritano, we can help you evaluate your liability exposures, understand how your insurance program responds, and identify opportunities to strengthen your risk management strategy. Talk with your M&G team about where your organization can focus next.

This article is provided for general educational purposes only. It does not constitute legal advice and does not grant or imply insurance coverage. Statistics reflect industry data as of the dates published in the referenced sources. 

Sources:

1. IVANS, IVANS Index Q1 & Q2 2026 Results. 
2. AM Best, U.S. Commercial Lines Segment Review, via Risk & Insurance, December 2025. 
3. Insurance Information Institute (Triple-I) and Milliman, P/C Underwriting Projections: A Forward View, May 2026. 
4. Travelers, 4 Social Inflation Drivers Contributing to Rising Claim Costs. 
5. Evercore ISI casualty award analysis, via Reinsurance News, December 2025. 
6. Sedgwick, 2025 Liability Litigation Commentary. 
7. Risk Placement Services (RPS), 2026 Q2 Umbrella and Excess Market Update. 
8. S&P Global Market Intelligence, other liability (occurrence) reserve analysis, via Carrier Management, March 2026. 
9. Milliman, The “Forever Chemical” Risk Is Now: PFAS Claims and Reserving.