Average premium hikes in the general liability insurance market ranged between 5.4% and 6.2% in the first quarter of 2024, according to a report by Insurica.

“The general liability insurance market has faced hardening conditions in recent years, largely due to increasing claim frequency and severity. As such, most policyholders have encountered ongoing rate jumps, stringent underwriting standards and limited capacity," Insurica said. “In the latter half of 2024, policyholders can anticipate another round of modest premium increases, while insureds operating in sectors with elevated liability risks may be vulnerable to larger rate hikes and coverage limitations.”

Developments and trends to watch moving forward:

• Litigation concerns: Businesses are facing an increase in litigation following liability incidents (actual or alleged) and greater penalties from such legal action due to social inflation. In 2023, nuclear verdicts reached a 15-year high, with the number of such verdicts increasing by 27% in the past 12 months alone.
• Increased medical expenses: Coverage for medical costs related to third-party injuries is a critical component of general liability insurance. The total value of medical care has jumped by over 115% since 2000. Surging medical expenses will likely continue playing a role in elevated general liability insurance claim costs going forward.
• Polyfluoroalkyl substances (PFAS): PFAS are a large grouping of chemicals and have been the subject of increased regulatory scrutiny stemming from emerging developments regarding the health and safety of these substances. As regulatory pressures and litigation concerns about these chemicals persist, businesses leveraging PFAS may experience elevated liability risks.