State of the Industry: Commercial Insurance 2026
Author Peter Katkov | Founder | Peter Katkov is the Founder and CEO of Apex Risk & Insurance Services, a boutique commercial insurance brokerage headquartered in Carlsbad, CA. Peter founded Apex to bring high-touch, client-focused risk mitigation back to San Diego business owners. Apex specializes in hard to place coverage for industries ranging from construction and hospitality to wave pools and life sciences.
Every business owner I talk to right now is feeling some version of the same thing: costs are up, the rules feel like they keep changing, and nobody warned them that their insurance renewal this year would look so different from the last one.
They’re not wrong. The commercial insurance market in 2026 is genuinely different. Not uniformly harder, not uniformly easier, different. It’s splitting, and where your business lands in that split will have a direct impact on what you pay, what you’re covered for, and how much negotiating leverage you actually have.
This is what’s happening in the market right now, why it matters for businesses in the $5M–$25M range, and, most importantly, what you can do about it before your next renewal.
The Market Is Not Moving in One Direction
The headline is actually encouraging on one front: property insurance is beginning to stabilize. After years of sharp increases driven by inflation, supply chain disruptions, and catastrophic weather events, rates in lower-risk regions are flattening or easing modestly. That’s real, and it’s welcome news.
But that’s only one part of the picture.
Casualty lines, general liability, commercial auto, umbrella, and excess coverage, are telling a very different story. These lines are under sustained upward pressure, and the forces driving that pressure are not short-term. Cyber remains a moving target. Directors and officers liability is tightening in response to expanded regulatory scrutiny.
What this means practically: if you’re looking at your renewal as a single number, you may be missing where the real movement is happening. A business might see flat or slightly improved property pricing and assume the market is softening, while their liability and auto costs have increased meaningfully and their umbrella capacity has quietly shrunk. You have to look at the whole program.
The Liability Problem Is Bigger Than Most Business Owners Realize
Let’s spend a moment on what’s actually driving the casualty market, because this is the part of the conversation that doesn’t happen often enough.
The technical term is “nuclear verdicts.” The practical definition: jury awards that exceed $10 million, and increasingly, $100 million. These were once considered outliers. They are no longer.
The numbers are stark. In 2024, there were 135 cases resulting in nuclear verdicts, a 52% increase over 2023, totaling $31.3 billion in awards. The median nuclear verdict reached $44 million in 2023, up from $21 million in 2020. Over the past decade, liability claims in the U.S. have surged by 57%, largely driven by these enormous jury awards.
Industries that interact with the public, hospitality, retail, real estate, transportation, are most exposed. But the ripple effect moves through the entire market. Carriers respond by raising rates, tightening limits, and scrutinizing their books more carefully. Businesses with clean loss histories are still feeling the effects because the market is pricing for volatility, not just your individual claims record.
Reinsurers are also pulling back. Where businesses could once purchase a $25 million umbrella, many are finding the ceiling has dropped to $10 million. That is a significant shift in how much risk you can transfer, and it’s happening quietly, at renewal, often without a clear explanation.
What should you do with this information? Three things.
- First, review your umbrella limits now, not at renewal. If you’re in an industry with public-facing exposure, your limits may no longer reflect the actual risk environment.
- Second, ask your broker to document your risk management practices in a way that tells a story to underwriters. Safety programs, training records, incident response processes, these aren’t just good operations hygiene, they’re underwriting evidence.
- Third, if you haven’t had a liability coverage conversation in the last 12 months, you’re navigating in the dark.
Commercial Auto: The Line That Needs the Most Attention Right Now
If you have a fleet of any size, even a handful of vehicles, commercial auto is the line where you should be most focused going into the second half of 2026.
The commercial auto sector has now generated an underwriting loss for 14 consecutive years. In 2024 alone, total underwriting losses reached $4.9 billion, significantly above the 11-year average of $2.9 billion. That’s not a soft market with room to negotiate. That’s a line where carriers are trying to stem losses, and they’re doing it by pricing more carefully and asking more questions.
Advanced vehicle technology has made repairs dramatically more expensive. Distracted driving continues to drive claims frequency. And carriers are now treating telematics, dashcams, and driver monitoring programs less as optional differentiators and more as baseline expectations.
If you’re running vehicles without any of these tools, you’re presenting yourself to underwriters as an unmanaged risk. That costs money.
The good news: implementing these programs often costs less than a single rate increase, and they demonstrate to carriers that you’re actively managing the exposure. That matters at renewal.
Property: Breathing Room, With Important Exceptions
Property is where many businesses will find genuine relief at their next renewal, but “stabilizing market” needs to be understood carefully.
The stabilization is real in lower-hazard areas for well-documented, accurately valued properties. It does not apply equally to businesses in wildfire zones, coastal regions, or areas with significant weather exposure. If your operations are in or near any of those areas, including much of Southern California, pricing pressure remains significant.
There’s also a valuation issue that’s easy to overlook. Construction costs remain elevated. That means the replacement cost of your property is almost certainly higher today than what’s reflected in your current policy. If you haven’t updated your property values in the last two years, there’s a meaningful chance you’re underinsured, and you may not discover it until you have a claim.
Accurate, current valuations are not a formality. They’re protection.
One emerging option worth knowing about: parametric insurance. These policies pay out based on predefined triggers, a specific wind speed, an earthquake of a certain magnitude, a weather event meeting defined criteria, rather than through traditional loss adjustment. They’re not a replacement for standard property coverage, but in high-exposure regions where capacity is limited, they can fill meaningful gaps. It’s worth a conversation.
Cyber in 2026: The Coverage That Now Requires Proof
We’ve written about this before, and this week’s Instructure/Canvas breach, where the criminal group ShinyHunters hit the company twice in a month, affecting nearly 9,000 schools and data on hundreds of millions of students, made the point more clearly than any market report could.
No industry is exempt. No size threshold makes you irrelevant to attackers. And the insurance market has responded accordingly.
Cyber underwriting has fundamentally changed. Carriers are no longer assuming you have basic security controls in place, they’re requiring you to prove it. Multi-factor authentication, endpoint detection and response tools, formal incident response plans, and documented employee training are now standard prerequisites, not bonus features. If those aren’t in place, coverage can be restricted, priced significantly higher, or declined outright.
This creates a practical problem for many small to mid-market businesses: they have cyber exposure but don’t know whether their controls are actually aligned with what their policy requires. A claim denial after a breach, because you didn’t have the controls your policy assumed, is one of the worst positions a business owner can be in.
Two things to do right now: read what your current cyber policy actually covers and excludes (not the summary, the policy), and have an honest conversation with your broker about whether your internal controls match your underwriting representations. If there are gaps, close them before renewal, not after a claim.
Renewals in This Market: What Actually Works
The approach that was adequate two or three years ago, wait for the renewal notice, respond to the underwriter’s questions, accept or negotiate the number, is not sufficient in this environment, particularly for more complex risks.
The businesses getting the best outcomes in 2026 are starting the conversation earlier, and they’re showing up with data.
That means presenting underwriters with a clear, organized picture of how the business actually operates: updated financials, documented safety and training programs, claims history with corrective actions, cybersecurity protocols, accurate property valuations. The goal is to make your risk legible, and to demonstrate that you’re running a well-managed operation, not just a premium to be priced.
Starting the renewal process 120 days out is now a reasonable standard for any business with meaningful complexity. For businesses with vehicles, significant property, public-facing operations, or elevated cyber exposure, even earlier is better.
There are also structural alternatives worth discussing with your broker if cost pressure is significant: captive insurance arrangements, layered programs to manage excess exposure, and adjusted retentions or deductibles. These aren’t right for every business, but for some, particularly those with predictable, low-frequency risk profiles, they can provide real long-term cost control.
What Business Owners Should Do Before July Renewals
If your renewal is coming up in the second half of the year, here’s a practical checklist of where to focus your attention:
Liability and umbrella: When were your limits last reviewed? If the answer is “at the last renewal, automatically,” schedule a conversation now. The liability landscape has shifted enough that last year’s limits may be genuinely inadequate today.
Commercial auto: If you have vehicles, get ahead of underwriting questions by implementing telematics and driver monitoring before renewal. Document what you’re doing. It changes the conversation.
Property values: Confirm that your replacement cost valuations reflect current construction costs. If your last appraisal was more than 18 months ago, it’s likely stale.
Cyber: Read your policy. Confirm your internal controls match your underwriting representations. If there are gaps, close them now.
The full program: Ask your broker to review your entire insurance program through the lens of how your business actually operates today, not how it operated when the policies were written. Lines, limits, and coverage structures that made sense two years ago may not be optimal today.
Preparation Is the Competitive Advantage
The commercial insurance market rewards the businesses that show up prepared. Not lucky. Not just well-managed in some abstract sense, prepared, documented, and proactive about how they present their risk.
That’s a different way of thinking about insurance than most business owners were taught. Insurance isn’t a transaction you complete once a year. It’s a reflection of how your business manages risk, and in 2026, carriers are paying closer attention to that than ever.
At Apex Risk, we work through this process with clients across industries, every day. The conversations that lead to the best outcomes are the ones that start early, cover the full picture, and treat renewal as a strategy, not a deadline.
If that’s not the conversation you’re having with your current broker, it might be time to change the conversation.
Peter Katkov is the founder of Apex Risk and Insurance Services, a commercial insurance brokerage based in San Diego, California. Apex Risk works with small to mid-market businesses to evaluate risk, design strategic insurance programs, and connect owners with the advisory resources they need to operate with confidence.
