Navigating a Challenging Market in 2025: What Business Owners Should be Looking for on their Commercial General Liability

?? Commercial General Liability (CGL) insurance faces growing challenges as the landscape evolves in 2025. Rising claims costs, NUCLEAR verdicts and economic pressures create hurdles for businesses but there are trends heading in the right direction if a strategic plan is in place. Here’s what to expect in the upcoming year and how to best approach your CGL policy in 2025!

?? Bad News:

Rising Litigation Costs: The cost of defending liability claims has skyrocketed due to increasing attorney fees and lawsuit heavy culture that we are seeing today. Jury awards in liability cases have grown by over 50% in the past decade, with the average award now exceeding $1 million.1

Nuclear Verdicts: Massive jury verdicts in personal injury and negligence cases are becoming more common with settlements surpassing $10 million more frequently. These cases not only impact individual businesses but also drive up costs across the entire market for business owners small and large.1

Social Inflation: Changes in what juries expectations are, increased limits on how much someone can be held responsible for and changing public perspectives have caused claim amounts to grow to levels previously that would have been impossible which continues to push insurance premiums higher and higher.

?? Good News:

Emerging Risk Management Tools: Underwriting and Risk Management teams now have access to advanced analytics and risk management software to better identify and mitigate liability exposures for certain classes of business. These tools are becoming an integral part of proactive risk reduction strategies to help business owners lower their exposure and ultimately their premiums if the steps are followed.

Carrier Adaptation: While the market is challenging, some insurers are stepping up with tailored CGL products for specific industries that best fit the needs of that niche. These products can help businesses secure the right coverage at competitive rates without being thrown into a nonstandard market. We are seeing some standard carriers still shrinking their appetite while others are growing theirs in areas they project to be profitable.

Focus on Prevention: Carriers increasingly reward businesses that implement proactive safety programs with premium discounts, demonstrating the value of investing in risk mitigation. We will continue to see this trend in 2025 from more and more companies pushing loss control and risk mitigation approaches for their insureds to reduce risk.

?? Best Practices:

Assess Your Liability Exposures: Conduct a thorough risk assessment of your business operations to identify potential areas of risk and where you may be left susceptible to an uncovered loss. Understanding your specific liability risks is the first step in creating a strong protection strategy for your business.

Invest in Training Programs: Regular employee training on workplace safety, customer interaction and industry-specific best practices for risk management can significantly reduce liability claims when demonstrated to the underwriting team by your broker.

Review Contracts Carefully: REVIEW YOUR CONTRACTS AND INVOLVE YOUR BROKER?to ensure your policies include appropriate indemnification clauses and clearly define liability responsibilities prior to signing the contract. This can protect your business from being held liable for issues caused by third parties but also if you sign a contract without the needed coverages in place you may end up out of pocket a substantial amount with it too late to add the cost of the increased insurance limits/coverages to the contract.

Partner with Your Broker: Engage a strategic insurance broker to help navigate the evolving market, negotiate competitive coverage and create leverage on your behalf with insurance companies to give you back control of your insurance program.

1. Constitution State Services. (n.d.). Trends driving escalating jury verdicts. Retrieved from https://www.constitutionstateservices.com/resources/trends-driving-escalating-jury-verdicts

2. Risk & Insurance. (n.d.). Social inflation drives 57% surge in US liability claims over a decade. Retrieved from https://riskandinsurance.com/social-inflation-drives-57-surge-in-us-liability-claims-over-a-decade/

Final Thought: Be Proactive, Not Reactive

The Commercial General Liability insurance market in 2025 will require a proactive approach and those who are reactive will be paying the price in their premiums. By identifying risks early, implementing preventive measures and collaborating with a strategic broker that isn’t just giving you your renewals the day before you renewal you can reduce exposures and maintain control over your insurance program costs.

Thanks for taking the time to read the latest edition of The Broker’s Edge on Insurance!

I’m Trevor Elliott, a Commercial Insurance Broker with over a decade of experience working with business owners across various industries. My goal is to provide valuable insights to the insurance industry and strategies to help business owners navigate the world of insurance with confidence.

If you found this helpful, be sure to subscribe to this newsletter for regular updates on the latest trends, buying strategies, and essential coverage tips and LET'S CONNECT on LinkedIn!

?