For owners, this may result in:
1. Higher general liability and umbrella pricing, even for portfolios with strong loss histories
2. Reduced availability in the first $10 million excess layer, often requiring multiple carriers to fill what a single insurer once would have
3. More frequent restrictive exclusions in both primary and excess layers, particularly for assault and battery (A&B), sexual abuse/molestation (SAM), and weapons/firearms
4. Increased reliance on surplus lines markets, especially for multifamily and hospitality sectors
5. Greater challenges meeting lender requirements, as some standard market exclusions may conflict with agency and institutional loan terms
Well-managed properties are not exempt; insurers are adjusting pricing to reflect severity across the board. Because many liability claims arise one to two years after an incident—or even after an asset has been sold—owners should consider long-tail exposure and ensure historical coverage aligns with their risk retention and funding strategies.
Managing risk in 2026: sector-by-sector overview
Performance varies by sector, and insurers are adjusting underwriting to the realities of each asset class. As a result, the steps owners may need to take to remain insurable—and meet lender expectations—differ across:
- Hospitality
- Multifamily
- Industrial
- Retail
- Office
Hospitality: steady demand, rising liability concerns
Hospitality continues to see steady demand, but insurers are focusing on operational exposures that may drive severe claims, including high employee turnover, inconsistent training, weak access control, and cyber-physical vulnerabilities (such as property management systems, keycard systems, and payments).
Underwriting considerations include:
- A&B, SAM, and human trafficking exposures
- Guest safety practices and access control
- Incident documentation and response protocols
- Vendor management (security, valet, housekeeping)
Recommended practices include:
- Implementing recurring training to address turnover-related risks
- Strengthening access control measures such as keycard elevators and ID verification for key reissuance
- Thoroughly documenting incidents to demonstrate diligence and potentially reduce claim severity
- Enhancing cyber-physical systems to limit operational disruption
Multifamily: steady demand, increased underwriting challenges
Fundamentals remain solid—renting is generally more affordable than buying—but underwriting friction is rising due to aging systems, increased water damage frequency, security concerns, and rising crime rates. Affordable housing faces additional risks under the Low-Income Housing Tax Credits (LIHTC) if units are uninhabitable at year's end. IRS rules may revoke that year’s credit even if insured. Standard policies typically exclude this timing risk, so a Tax Credit Endorsement may be needed to protect LIHTC value after loss.
Underwriting considerations include:
- Water losses and deferred maintenance
- Crime exposure, especially in workforce and affordable housing
- A&B and SAM exclusions conflicting with agency lender requirements
- Aging systems: plumbing, HVAC, electrical, roofs
- Environmental exposures (mold, contamination)
- Increasing habitability claims
Recommended practices include:
- Conducting proactive maintenance to reduce water-loss frequency
- Improving lighting, entry systems, and security protocols in higher-crime areas
- Verifying that A&B and SAM coverage meet lender requirements before refinancing or acquisition
- Adding environmental liability coverage to address common gaps
- Ensuring valuations reflect actual rebuild costs to avoid co-insurance penalties and underinsurance
Industrial and data centers: growing demand, higher engineering expectations
With global demand for digital infrastructure projected to require $6.7 trillion in new data center investment by 2030, insurers have raised expectations around critical systems.
