General Liability Insurance Cost in 2025: Year in Review
2025 was the year the commercial insurance market went soft. General liability premium increases moderated every quarter, from +4.2% in Q1 to +2.8% in Q3 per the CIAB Commercial Property/Casualty Market Index, and by Q4 the average increase across all account sizes was just +0.2%, the softest conditions since 2017. The exceptions ran the other way: commercial auto and umbrella stayed firm on litigation pressure, and small accounts saw the least relief.
2025 quarterly premium trend
The Council of Insurance Agents and Brokers (CIAB) Commercial Property/Casualty Market Index surveys broker premium changes every quarter. The 2025 editions tell a consistent story: moderation in every quarter, ending the year at near-flat pricing and tipping into outright decline in early 2026.
| Quarter | Avg change, all account sizes | General liability line | Market note |
|---|---|---|---|
| Q1 2025 (Jan-Mar) | +4.2% | +4.2% | Softening begins; down from +5.4% in Q4 2024 |
| Q2 2025 (Apr-Jun) | +3.7% | +3.9% | Moderation continues across most lines |
| Q3 2025 (Jul-Sep) | +1.6% | +2.8% | Soft market clear; commercial property turns negative |
| Q4 2025 (Oct-Dec) | +0.2% | Low single digits | Softest conditions since 2017; nine lines decrease |
| Q1 2026 (Jan-Mar) | -1.2% | Within +0.8% major-lines average | First overall average decrease since Q3 2017 |
The general liability line itself never decreased in 2025; it rose more slowly each quarter. CIAB did not publish a standalone Q4 GL figure in its summary release, but GL was not among the nine lines recording decreases that quarter, putting it in low-single-digit increase territory.
By-line 2025: a market moving in two directions
The averages hide a split market. Property, cyber, D&O, employment practices, and workers compensation softened sharply on growing carrier capacity and a friendlier reinsurance market. Casualty lines exposed to litigation severity, commercial auto above all, kept rising.
| Line | Q1 2025 | Q2 2025 | Q3 2025 | Trajectory |
|---|---|---|---|---|
| General liability | +4.2% | +3.9% | +2.8% | Still rising, slower each quarter |
| Commercial auto | +10.4% | +8.8% | +7.4% | Firmest line all year (+6.6% in Q4) |
| Umbrella | +9.5% | +11.5% | +5.5% | Peaked in Q2, then halved (+4.7% in Q4) |
| Commercial property | +2.9% | +1.9% | -0.2% | First decrease since Q2 2017 |
| Workers compensation | -2.6% | -1.8% | -1.9% | Negative all year |
Why most of the market softened
Capacity. New carriers and MGAs entered commercial property and specialty lines through 2025, and reinsurance pricing softened after the hard renewals of 2023 and 2024. CIAB respondents described a stable-to-soft market across most lines by the third quarter, and commercial property recorded its first premium decrease since Q2 2017 (-0.2% in Q3 2025). By Q4, nine lines of business were decreasing, led by D&O (-3.8%), cyber (-3.3%), and employment practices (-2.6%).
Why casualty stayed firm
Litigation severity. Social inflation (juries growing more comfortable with very large awards), nuclear verdicts of $10 million or more, and third-party litigation funding all push casualty claim costs up independently of the capacity cycle. Commercial auto carried the heaviest pressure: +10.4% in Q1 2025, still +6.6% in Q4, and +5.8% in Q1 2026, extending an unbroken run of quarterly increases. Umbrella followed auto, peaking at +11.5% in Q2 2025 before moderating to +4.7% by Q4 as severity claims spilled from auto policies into the umbrella layer above them.
Small accounts saw the least relief
The soft market arrived top-down. In Q4 2025, large-account premiums fell for the first time since Q4 2017 while small-account premiums were still rising.
| Account size | Q4 2025 premium change | Note |
|---|---|---|
| Large accounts | -2.1% | First decline since Q4 2017 |
| Medium accounts | 0.0% | Flat |
| Small accounts | +2.8% | Smallest benefit from the softening |
Into 2026: the first average decrease since 2017
The CIAB Q1 2026 survey, published May 2026, confirmed the direction: average premiums across all account sizes decreased -1.2%, the first overall decline since Q3 2017. The five major lines (commercial auto, commercial property, general liability, umbrella, workers compensation) averaged a modest +0.8% increase, with commercial property down -5.5% and workers compensation down -3.7%. Commercial auto remained the outlier at +5.8%.
For a typical small business buying GL, that points to flat to low-single-digit movement at 2026 renewal. Operations with heavy auto exposure or litigation-prone risk profiles (trucking, premises-heavy hospitality, construction) should still expect casualty pressure above the headline averages.
How to use a soft market at renewal
- Shop the renewal across at least three carriers. Soft-market pricing spread is wide; carriers hungry for new business will undercut an incumbent holding renewal rates.
- Verify your class code still matches your operations. Misclassification costs the same in any market cycle.
- Price a BOP bundle against standalone GL if you also need property coverage; property softened more than GL in 2025, which improves the bundle math.
- Review your umbrella layer separately. Umbrella pricing remains firmer than GL, so quotes there deserve their own comparison rather than riding along with the GL renewal.
- Keep the claims record clean. A claim-free file is the strongest negotiating asset when carriers are competing for business.