Running a small to medium-sized business comes with its fair share of challenges. From managing employees to keeping customers happy, your to-do list is likely already overflowing. The last thing you need is a surprise when you open your insurance renewal notice. However, staying ahead of market trends is one of the best ways to protect your bottom line and ensure your business stays secure.
If you have been watching the commercial insurance market, you may have noticed that costs for Umbrella and Excess Casualty insurance are shifting. You aren’t alone in noticing this trend. Across the industry, business owners are facing a challenging landscape characterized by rising premiums and tighter restrictions on coverage.
At Bull Insurance Agency, we believe that knowledge is power. Understanding why these changes are happening can help you plan your budget effectively and make smarter decisions about your coverage. We are here to simplify the complex world of insurance trends and break down exactly what the 2026 outlook means for your business—and how we can help you navigate it with ease.
The Current State of Rates
Let’s start with the numbers. If it feels like premiums are climbing, the data supports that feeling. In the first half of 2025, the umbrella and excess casualty segment saw the largest average rate jumps across major commercial lines, coming in at approximately 11.5%.
Looking ahead to 2026, industry experts are predicting that this trend will continue, with price increases expected to range between +8% and +15%.
Why the jump? It largely comes down to the “hardness” of the market. In insurance terms, a “hard market” means that demand for insurance is high, but the supply (or capacity) that insurers are willing to offer is limited. This is particularly true for businesses that fall into “higher-hazard” classes. However, even well-managed, low-risk accounts are seeing modest fluctuations in their premiums.
While these percentages might seem daunting, they don’t have to be a cause for panic. Understanding the specific factors driving these costs allows us to look for smarter solutions tailored to your needs.
The Impact of “Nuclear Verdicts”
One of the biggest drivers of rising insurance costs is something industry experts call “social inflation.” This doesn’t refer to the price of goods at the grocery store. Instead, it refers to the rising costs of insurance claims resulting from increasing litigation and larger jury awards.
Specifically, the market is reacting to a rise in “nuclear verdicts.” A nuclear verdict is typically defined as a jury award that exceeds $10 million. According to data from Marathon Strategies, 2024 was one of the worst years on record for these massive verdicts, and there are few signs that this trend is slowing down.
Unfortunately, it isn’t just about verdicts hitting the $10 million mark anymore. We are now seeing “thermonuclear” verdicts—awards that reach into the hundreds of millions, sometimes resulting in nine-figure losses.
When a lawsuit results in a payout that far exceeds a business’s policy limits, it puts immense strain on the insurance carriers. To remain profitable and capable of paying future claims, insurers are responding by tightening their capacity (the amount of coverage they offer) and raising their pricing structures. This is a direct response to the complex legal climate we are operating in today.
Stricter Standards and Tighter Underwriting
Because of the high costs associated with legal claims, insurance companies are becoming much more careful about who they insure and for how much. This is known as “underwriting discipline.”
In the past, securing high limits on an Umbrella or Excess policy might have been a straightforward process. Now, insurers are maintaining strict guidelines. Industry experts have noted that for lead layers of coverage, many insurers are capping their coverage at around $10 million per risk. This is especially common for businesses in tougher jurisdictions or industries.
For business owners, this creates a few specific challenges:
- Layering Complexity: To get the total coverage amount you need, you might now require a “tower” of insurance. This means buying layers of coverage from different insurers to reach your desired limit, which can be more complex to manage.
- Higher Attachment Points: Insurers are increasingly requiring higher “attachment points.” This means your primary insurance (like General Liability) might need to cover more of a loss before your Umbrella policy kicks in.
- New Exclusions: Insurers are adding specific exclusions to policies to avoid paying for certain high-risk categories. Common exclusions we are seeing now include liability related to offensive conduct, social media losses, PFAS (forever chemicals) exposure, and cyber liability.
This environment means that having an expert partner is more important than ever. You need someone who can review the fine print and ensure you aren’t left with dangerous gaps in coverage.
The E&S Market: A Vital Solution
If you are reading this and wondering how you will find coverage if standard insurers are saying “no,” there is good news. A robust solution exists in the Excess and Surplus (E&S) market.
The E&S market is a specialty sector of insurance designed to cover risks that standard carriers won’t touch. Because they have more flexibility in how they design their rates and forms, E&S insurers can step in to provide protection where others cannot.
This sector has been flourishing. In 2024, domestic E&S premiums totaled approximately $98 billion—a 13% increase from the previous year. This growth is nearly triple what the market saw in 2018.
For many small to medium-sized businesses, especially those with unique risks or those facing capacity issues in the standard market, the E&S space is becoming a go-to outlet. These insurers excel at creating innovative coverage structures. If you are finding it difficult to secure the limits you need, turning to the E&S market can help remedy potential gaps in your protection.
Frequently Asked Questions
Why is my premium going up if I haven’t had any claims?
This is a very common question. Your premium increase is often less about your specific business history and more about the overall market trends. Because “nuclear verdicts” and litigation costs are rising across the board, insurers must raise rates for everyone to ensure they have enough money to pay out these massive claims when they occur.
What can I do to keep my costs down?
Focusing on risk management is key. Insurers favor “well-managed” accounts. This means demonstrating that you have strong safety protocols, employee training, and risk mitigation strategies in place. Additionally, working with an independent agency like Bull Insurance Agency allows you to shop the open market, comparing different carriers to find the most cost-effective option.
Is Umbrella insurance really necessary for a small business?
In today’s legal climate, yes. With jury verdicts regularly exceeding $10 million, a standard General Liability policy may not be enough to save your business from bankruptcy after a major lawsuit. Umbrella insurance provides that essential extra layer of safety.
Secure Your Business’s Future with Confidence
The insurance landscape for 2026 may look challenging, but you do not have to navigate it alone. While rates are predicted to rise and underwriting is getting stricter, options are still available for business owners who know where to look.
At Bull Insurance Agency, we realize your time is valuable. We make the process of finding the best insurance coverage simple. We can help you review your current limits, explore options in the E&S market if necessary, and build a coverage tower that keeps your business safe.
Simply put, we take the frustration out of your insurance buying process. Because our agency is 100% independent of any one single company, we have the freedom to shop the open market for the best combination of cost and coverage.
Don’t let market predictions keep you up at night. Contact us today for a policy review, and let us help you achieve affordable peace of mind.