General Liability Insurance 2026 Midyear Market Outlook

At year-end 2025, the 2026 price prediction for general liability stood at +1% to

+6%. Pricing data through the first half of 2026 suggests rates are tracking toward the upper end of that range, with industry sources indicating renewal rate changes in the 5% to 8% range for many accounts.

However, certain sectors, such as construction, habitational and retail, are experi-encing above-average rate pressure, as insurers apply greater underwriting scru-tiny to higher-risk accounts. While admitted capacity remains ample for preferred accounts, appetite is narrowing for higher-hazard and loss-affected businesses, with Excess & Surplus insurers providing capacity where admitted markets are more selective.

While general liability rates remain within predicted ranges for most businesses, conditions may be more challenging for some accounts.

Overall, carriers are increasingly differentiating by industry, loss history, and juris-diction, and the gap between well-performing and challenging risks is widening. Businesses that demonstrate strong loss control and documented risk manage-ment practices may be best placed to secure favorable pricing and terms.

Current Market Trends and Cost Drivers

Social Inflation and Nuclear Verdicts

Social inflation continues to play a significant role in driving up commercial gen-eral liability (CGL) claim costs, with nuclear verdict activity remaining elevated.

According to Marathon Strategies’ February 2026 report, 2024 saw 135 corporate lawsuits result in nuclear verdicts totaling $31.3 billion, with no clear signs of moderation to date.

These verdicts were recorded across 34 states and 77 courts, suggesting that nuclear verdict exposure is extending beyond historically high risk jurisdictions.

Plaintiff tactics include heavily appealing to jurors’ emotions, known as rep-tile theory, and joinder—adding additional parties to lawsuits—to expand the

scope of claims and amplify perceived harm. According to Marathon Strategies’ research, verdicts are also increasingly influenced by shifting jury pool demo-graphics, including an influx of Millennial and Gen Z jurors, who are typically more pro-plaintiff and less trusting of corporations. Third-party litigation funding (TPLF), where external investors finance claims in exchange for a share of the proceeds, is further driving social inflation.

In response, several U.S. states enacted legislation addressing TPLF in 2025. Addi-tionally, the Litigation Funding Transparency Act was introduced in February 2026, which, if enacted, would require disclosure of third-party funding in mass tort and class action lawsuits. However, these developments have not yet produced a mea-surable change in claim behavior or broader litigation dynamics. Consequently, policyholders facing increased claims severity may encounter higher retentions, tighter terms and closer scrutiny at renewal.

Coverage Exclusions for Emerging Risks

Policy exclusions for PFAS, biometric data and active shooter incidents are now widely established in the general liability market. A more recent development is the introduction of a human trafficking exclusion by the Insurance Services Office (ISO) in January 2026, which carriers may now incorporate into policies at renewal. Under U.S. law, businesses can face civil claims if they are found to have know-ingly benefited from trafficking activity, even if they were not directly involved.

Industries such as hospitality, retail and transportation are particularly vulnerable. According to the Human Trafficking Legal Center, civil claims under the Trafficking Victims Protection Reauthorization Act increased from six in 2004 to 280 in 2024, and court decisions on whether standard CGL policies respond to these claims have produced inconsistent outcomes. The new ISO exclusion is a direct response,

allowing carriers to explicitly remove this coverage going forward. Businesses in vulnerable sectors should check whether their carrier has applied it at renewal to reduce exposure.

The ISO also introduced new artificial intelligence (AI)-specific exclusionary lan-guage in January 2026. Previously, businesses using AI in service delivery could reasonably expect standard CGL policies to respond to AI-related claims.

Some carriers may now exclude coverage for bodily injury, property damage, and personal and advertising injury arising from AI use.

Organizations should scrutinize policy wording at renewal and consider whether additional coverage is necessary, particularly as a growing number of states have introduced legislation creating new rights of action for individuals harmed by algo-rithmic decision-making, which may expand the pool of potential claimants.

Looking Ahead

General liability pricing is expected to see single-digit rate increases for most accounts, tracking toward the upper end of the year-end prediction. Factors such as tariff-driven cost inflation and nuclear verdict activity may push rates above the predicted range, particularly for businesses in higher-risk sectors such as construction, habitational, retail, hospitality and transportation. Low-er-risk accounts with strong loss histories are likely to benefit from more favor-able pricing and terms.

At the same time, the introduction of new ISO exclusions may leave policyhold-ers facing new or expanded coverage gaps at renewal. Organizations should scrutinize policy wording to understand how these exclusions are being applied and assess whether additional coverage or alternative risk management strate-gies are needed to mitigate exposure.

Contact us today for additional market updates and resources.