Liability

Competition expands, though insurers remain selective

KEY TAKEAWAYS

Liability conditions still vary by line, industry, attachment point20, and loss experience. Strong risks can find competition, particularly in excess layers.

More carriers on an excess tower can mean more complexity. Buyers should scrutinize coverage differences and claims coordination across towers.

Facilities and MGAs can provide additional capacity, but buyers should evaluate carrier security, claims authority, and continuity.

Expected rate changes next quarter*

5% to 10% increase

General liability

8% to 12% increase

Auto liability

5% to 15% increase

Lead umbrella

Flat to 15% increase

Excess casualty

Nowhere is the complexity of today's P&C market more evident than in liability. Conditions improved for some buyers in the second quarter as carriers showed greater willingness to compete, particularly in the middle and upper excess layers. Yet there is no single liability market: Pricing, capacity, and terms vary considerably by line, industry, attachment point, loss experience, and carrier appetite. Liability has stabilized since the hard market of a few years ago, as loss trends have plateaued, although at a higher level.

That variation is reflected in the numbers. Second-quarter rates rose an average of 1.8% for general liability and 4.5% for auto liability, according to the Council of Insurance Agents & Brokers (CIAB).** Lockton data shows the median price per million rose 6.2% for lead umbrella21 and 8.2% for excess casualty.

Those averages, however, obscure meaningful differences. General liability remains comparatively stable for many buyers. Auto liability is generally the most challenging line, particularly for large fleets seeking unaggregated coverage. Competition is most visible in the middle and upper excess layers, while lead umbrella pricing and capacity remain under greater pressure. Buyers should not expect relief higher up in the tower22 to automatically extend to the lead layer.

Account size also influences conditions. Major accounts often attract more competition in excess layers but face greater structural complexity, while middle market buyers typically see pricing that more closely reflects broader market conditions.

Casualty rate increases and reserve adequacy remain under scrutiny as loss costs continue to rise, despite some litigation reform.

Chubb CEO Evan Greenberg estimated that U.S. casualty loss costs are rising 6% to 7% annually for primary coverage, and 9.5% to 12% for excess. He also warned that pricing in several casualty segments is failing to keep pace. For buyers, today's competition creates an opportunity to improve price and program structure. But if the gap between pricing and loss costs persists, insurers may ultimately seek higher rates or tighter terms at future renewals.

The casualty reinsurance market reinforces this selectivity. While capacity remains available, reinsurers continue to scrutinize U.S. liability portfolios and loss development. As a result, support and capacity deployment can vary significantly based on an insurer’s performance, portfolio mix, and reinsurance structure.

Buyers with clean loss experience and favorable risk profiles have greater room to maneuver. Competition has increased in the umbrella and excess casualty market, particularly since the first quarter, and strong marketing efforts are producing beneficial results.

Pricing and capacity remain constrained for certain segments, including insureds with large automobile fleets, transportation companies, and contractors seeking excess-of-wrap coverage in their practice programs. For these buyers, the more realistic opportunity may be to improve coverage terms, attachment points, or program structure rather than achieve significant price reductions.

AI also opens the business world to a new menu of risks. The particularly affects general liability, where advancements in AI are evolving faster than forms can keep up.

Buyers should use current competition to revisit restrictions added during the harder market, including restoring previously excluded coverage, improving attachment points, or removing exclusions. Any improvement should be evaluated across the full tower. Greater competition can also introduce complexity, as large towers often involve more carriers, forms, exclusions, and claims practices.

Buyers should review follow-form provisions23, exhaustion language24, defense obligations, settlement authority, and key exclusions across all layers to ensure consistent coverage. Buyers should also take the time to understand the claims handling philosophy, expertise, and track record of their trading partners, as small improvements in pricing can quickly evaporate in the face of a poorly handled claim.

The market remains less competitive for distressed risks, businesses with significant loss histories, or exposures outside standard carrier appetites. Facilities, MGAs, and managing general underwriters (MGUs)25 can provide additional capacity and specialized underwriting expertise, but their structures vary considerably.

MGAs and other delegated underwriting authority enterprises generated $108.7 billion in direct premiums in 2025, up 17.8%, according to AM Best. Buyers should evaluate carrier security, claims authority, renewal continuity, and the durability of the underlying capacity arrangement, including the risk-bearing carrier and any supporting reinsurance.

While buyers were generally more optimistic over the last quarter, they should keep an eye on factors that could impact carriers and cause the market to shift.

Several other issues the market is following include:

Auto liability

Capacity remains constrained for large fleets seeking unaggregated coverage. Aggregated or structured programs may attract more competition but introduce different risks. Multiple losses can erode the aggregate, reducing the protection for subsequent claims. Buyers should model aggregate exhaustion and evaluate reinstatement provisions before changing structures.

Third-party hauling

Companies face increasing scrutiny for the conduct of transportation carriers they hire to move freight. Plaintiffs may pursue shippers and freight brokers under negligent-selection, agency, or vicarious-liability theories. Buyers should review carrier selection procedures, safety record monitoring, contractual indemnity, insurance requirements, and verification practices.

Excess-of-wrap construction programs

Carriers remain highly concerned about aggregating exposure across multiple wrap-up programs, particularly when underwriting, safety controls, contractual requirements, and claims management vary by project. As a result, they are increasingly adding excess-of-wrap exclusions to contractors’ practice programs. Buyers should review enrollment, underlying limits, completed-operations periods, coverage consistency, and project controls.

social media

Social media can accelerate the spread of allegations that influence public and juror perceptions, and complicate defense and settlement strategies. Organizations should establish escalation procedures connecting risk management, legal, claims, and communications teams. Underwriters are also paying closer attention to corporate governance surrounding these risks.

Buyers should use improving competition to strengthen coverage, improve attachment points, reduce inconsistencies between layers, and evaluate additional limits where appropriate. Large or complex risks should begin renewals early and develop credible exposure and loss narratives. The objective is a liability program that responds consistently and aligns with an organization’s risk profile and tolerance for volatility. And buyers should also work with experienced brokers to assess the performance and track record of trading partners to ensure they don't sacrifice claims-handling quality for slight pricing improvements.

*Note: Rate ranges presented here reflect expected renewal outcomes — as of the Lockton Market Update publication date — over the next quarter for most insurance buyers. These should not be taken as a guarantee of any specific results during renewal negotiations. Depending on risk profiles, loss histories, account specifics, and other factors, individual buyers may renew their programs outside these ranges.

**Charts in this report using Lockton P&C Edge Benchmarking data show median rate changes year over year. Median figures, however, are not available for general liability and auto liability data sourced from CIAB.

20Attachment point: The point at which excess coverage or reinsurance will begin to respond. Once losses exceed the attachment point, excess insurance or reinsurance policies pay claims up to their stated limits. (See glossary.)

21Lead umbrella: A lead umbrella policy is the first umbrella policy in a multilayer excess program that sits directly over the primary policies. (See glossary.)

22Tower: A layered insurance program composed of a primary policy and multiple excess layers stacked vertically. Each layer provides coverage above the previous one, up to the total combined limit purchased by the insured. (See glossary.)

23Follow-form provisions: Provisions under which an excess policy follows the terms and conditions of an underlying policy, except where the excess policy specifically states otherwise. (See glossary.)

24Exhaustion language: Policy language specifying when underlying insurance is considered “exhausted” and an excess policy can respond. It may address, for example, whether underlying limits must be paid by the underlying insurer or may also be satisfied by the insured or another party. (See glossary.)

25Managing general underwriter (MGU): An insurance intermediary granted authority by an insurer to perform specific functions such as risk selection, underwriting, and binding. MGUs typically do not handle claims or broader administrative functions. (See glossary.)