Commercial Insurance Costs Diverged in Second Quarter
While property insurance premiums fell, businesses faced sharp increases in liability and employment practices costs.
Updated on Oct. 2, 2026 in Employment
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Data from Lockton shows that median property rates dropped 10.5% in the second quarter of 2026. Conversely, liability coverage saw significant price hikes as insurers grapple with rising claim costs.
Why it matters
The divergence in pricing reflects an effort by insurers to align premiums with rising loss costs in the casualty sector. This shift may impact operating budgets for employers facing higher liability and employment practices coverage costs.
Median employment practices liability rates climbed 29% in the second quarter. Meanwhile, general liability pricing rose 1.8%, while property rates fell 10.5%.
The players
Lockton
An independent insurance brokerage that provides risk management and employee benefit consulting services.
Chubb
A global insurance company that provides commercial and personal property and casualty insurance products.
The details
Property insurance costs softened due to a quiet 2025 hurricane season and competitive reinsurance markets. However, liability insurance faced upward pressure driven by increased claim frequency, legal defense costs, and rising medical severity, which grew 4% in 2025. Insurers are now raising premiums to bridge the gap between existing pricing and the cost of covering these claims.
Timeline
2025: Workers' compensation medical severity grew 4%.
Q2 2026: Median property and liability rate changes occurred.
March 2026: Lockton identified casualty as a market outlier.
July 2026: Chubb CEO discussed casualty loss cost trends.
2027: Property rate reductions may become harder to secure.
Money Landscape
This report highlights a shifting insurance market where property and liability cycles are moving in opposite directions. It marks a departure from uniform pricing trends as carriers react to different risk factors across asset classes.
Businesses may see increased line items for casualty and employment practices insurance in upcoming budget cycles. Consult with a qualified insurance professional to review current coverage and discuss potential cost-mitigation strategies for your organization.
The takeaway
Insurance markets are increasingly sensitive to rising legal and medical costs, which are currently outpacing property-related savings. Review your current commercial coverage and loss-prevention protocols with a qualified insurance professional to prepare for potential premium volatility.
Further reading
For more on how these trends affect businesses and labor costs, see our guide on Employment.
Source note: This article includes information reported by Insurance Business.
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