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Commercial Insurance Costs Rose Across Multiple Sectors

Rising liability and employment practices rates have offset property insurance price drops for many US businesses.

Updated on Oct. 2, 2026 in Employment

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Rising liability and employment practices insurance costs are offsetting recent property insurance premium decreases for many U.S. businesses in 2026. AI Illustration. Upload story photo >

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Lockton reported that while commercial property rates decreased by 10.5% in the second quarter of 2026, costs for casualty and employment practices liability insurance climbed. Rising claim severity and legal defense costs are driving these premium increases.

Why it matters

The insurance market is balancing property savings against the need to address a gap between current pricing and rising casualty loss costs. Employers now face higher coverage expenses as insurers adjust to increased claim frequency.

Employment practices liability rates jumped 29% in Q2, while excess casualty pricing rose 8.2% and general liability increased 1.8%. These figures follow a 2025 workers' compensation accident year combined ratio of 102%.

The players

Lockton

Lockton is a private insurance brokerage firm that provides risk management and employee benefit consulting services.

Chubb

Chubb is a publicly traded property and casualty insurance company operating in 54 countries and territories.

The details

Lockton noted that property rate softening was driven by a quiet 2025 hurricane season and competitive reinsurance markets. Conversely, liability coverage faces pressure from rising claim frequency and the influence of AI-assisted legal filings.

Timeline

  1. 2025 saw workers' compensation medical severity grow by 4%.

  2. Q2 2026 marked the period for median property and liability rate changes.

  3. March 2026 was when Lockton identified casualty as a market outlier.

  4. July 2026 saw casualty loss cost trends discussed by Chubb leadership.

  5. 2027 is the timeframe when property rate reductions may become harder to secure.

Macro View

This insurance market shift follows the 2025 workers' compensation accident year combined ratio of 102%, a metric that signals persistent underwriting pressure. These current trends mirror historical cycles where insurers tighten terms to close the gap between premium pricing and actual loss costs.

Businesses should anticipate higher premiums for liability and employment-related coverage despite potential savings in property insurance. These increased costs may impact bottom lines as firms adjust to rising claim defense budgets and medical severity.

The takeaway

Companies should review their insurance renewals early as favorable market conditions for property coverage begin to narrow. Managing the rising cost of casualty claims will remain a primary focus for risk managers through 2027.

Further reading

Learn more about labor costs and workplace insurance in the United States Employment section.

Source note: This article includes information reported by Insurance Business.

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