Mike Kirkpatrick, CPIA, Licensed Insurance Advisor, Advantage Insurance
Good news first: the commercial insurance market is finally starting to calm down after years of steep premium hikes. That said, there’s still a lot going on behind the scenes—from climate risks to cyberattacks to rising legal costs—that can affect what you pay and what’s covered. Here’s a friendly rundown of what’s shaping the market this year, and what you can do about it.
1. Extreme Weather Is Still a Big Deal
Hurricanes, wildfires, floods and severe storms keep driving up property claims. If your business is in a higher-risk area, you might notice:
- Higher deductibles
- Less available coverage
- Stricter policy terms
- More focus on risk mitigation (think: storm shutters, sprinkler systems, etc.)
Even where property insurance is getting more competitive overall, businesses in catastrophe-prone spots are still feeling the pinch.
2. Cyber Risks Are Evolving Fast
Cyber insurance is one of the most fast-moving corners of the industry right now. AI is a double-edged sword here—it’s helping companies build stronger defenses, but it’s also helping bad actors get sneakier. Watch out for:
- AI-powered phishing emails
- Ransomware
- Business email compromise scams
- Supply-chain vulnerabilities
- Data privacy issues
Insurers care less about whether you can prevent every incident and more about how fast you can detect, respond and bounce back.
3. Lawsuits Are Getting Pricier
“Social inflation” is a fancy way of saying lawsuits and jury awards are getting bigger. This is hitting industries like construction, transportation, manufacturing, healthcare and retail especially hard. If your risk management and contracts aren’t airtight, expect higher premiums or fewer coverage options.
4. Commercial Auto Is Still Tricky
If you run a fleet, you already know commercial auto coverage is tough right now. Blame it on:
- Pricier vehicle repairs and parts
- Fewer available drivers
- Distracted driving
- More severe accidents
The upside? Companies investing in telematics, driver monitoring and safety training are seeing better outcomes at renewal time.
5. Inflation Still Stings
Inflation has cooled off compared to recent years, but rebuilding and replacing equipment still costs more than it used to. It’s worth double-checking your:
- Property valuations
- Equipment schedules
- Business interruption limits
- Inventory values
Getting caught underinsured after a loss is a costly surprise nobody wants.
6. Insurers Want More Info Than Ever
Underwriters are asking more detailed questions at renewal—about your cybersecurity, fire protection, disaster recovery plans, safety programs, claims history and (in some industries) ESG practices. The takeaway? Businesses with strong risk management are getting rewarded with better pricing and broader coverage.
7. Workforce Pressures Are Adding Up
Labor shortages, workplace safety concerns and shifting workers’ comp rules are all putting pressure on employers. Rising medical costs are part of the mix too, so it’s worth keeping an eye on how these changes affect your claims costs.
8. Competition Is Coming Back
Here’s some genuinely good news: insurers are competing harder for business again in several commercial lines. If you’ve got a strong loss history, solid risk management, low catastrophe exposure and good cybersecurity, you may see better pricing and coverage than you have in years. High-risk industries, though, are still facing an uphill climb.
The Bottom line
This year is shaping up to be a transition year—moving from a tough, expensive market toward something more balanced. But climate change, cyber threats, litigation and shifting regulations mean the risks are still complex. The businesses that come out ahead will be the ones reviewing their coverage regularly, investing in loss prevention, and keeping their operations tight.
Want to make sure your business is properly protected in 2026? Visit www.aatins.com to learn more and get the guidance you need.