Landlords and business owners across the United States are facing a rapidly changing—and, for many, increasingly perilous—insurance landscape. The past few years have seen a dramatic surge in lawsuits targeting property owners, fueled by both a rise in severe accidents and an evolving legal environment that is emboldening plaintiffs and their attorneys. The result? Liability insurance premiums are climbing at rates that outpace inflation, and the very nature of risk management for real estate and commercial enterprises is being fundamentally redefined.
Aron Sotnikoff, director of risk management for Time Equities, knows this story all too well. When a tenant at one of his firm’s properties claimed to have slipped and fallen in a puddle, Sotnikoff reviewed the security footage and was left scratching his head. “This person didn’t even have the good sense to actually fall,” he recounted, according to Bisnow. But even dubious claims like this have become routine, and the consequences are anything but trivial: since 2020, Time Equities’ umbrella and excess insurance premiums have quadrupled.
What’s driving this relentless rise? The numbers tell a stark story. Federal tort cases in the U.S. jumped by 20% between 2022 and 2024, with premises liability claims—think slip-and-fall accidents, elevator mishaps, toxic exposures, and wrongful deaths—rising from 4,516 cases in 2022 to 5,632 in 2024, as reported by Risk & Insurance. The severity of general liability claims on commercial properties has ballooned by 57% over the last decade, according to The Baldwin Group. And it isn’t just the frequency of claims that’s up—the size of jury awards is skyrocketing, too. “Years ago, a sprained ankle would be $50K. Now, it’s $1M,” said Christine Chipurnoi, executive vice president at USI Insurance Services, in an interview with Bisnow. “The numbers are staggering as to what’s coming through, and the court systems are really, really tough.”
Part of the reason for these outsized verdicts is a phenomenon dubbed “social inflation”—a term insurance insiders use to describe the growing willingness of juries to hand out substantial punitive damages, often as a way to punish what they see as corporate indifference or misconduct. This trend is especially pronounced in the Gulf South, where legal professionals are witnessing what Risk & Insurance calls a “market-altering shockwave.” In Alabama, for example, liability claim severity jumped 59% from 2020 to 2024—far outpacing inflation. Mississippi, too, has seen a 30.6% increase in work-related fatalities, providing more fodder for high-stakes litigation.
As fatal incidents remain high—Alabama recorded 75 fatal work injuries in 2022, with transportation events leading the way—jury attitudes are shifting. According to legal experts cited by Andy Citrin Injury Attorneys, juries are increasingly seeing accident cases as moral referendums, not just disputes over negligence. The result is a surge in so-called “nuclear claims”—jury verdicts or settlements of $10 million or more. A 2025 Marathon Strategies report found the number of premises liability or negligence verdicts exceeding $10 million rose by 52% in 2024 compared to the previous year.
Personal injury law firms have seized this moment, leveraging aggressive marketing and new litigation strategies to drive up both the number and value of claims. Morgan & Morgan, the largest personal injury firm in the country, spends a staggering $350 million a year on advertising, saturating highways and cable TV with their message. Their approach is mirrored by regional giants like Andy Citrin Injury Attorneys, which boasts more than $650 million recovered for clients and a $13.1 million verdict for a catastrophic workplace injury, as noted in their Power Briefing. These firms are not just relying on traditional legal arguments; they’re employing jury consultants, mock trials, and compelling visual aids—like 3D accident reconstructions and “day in the life” videos—to create powerful emotional connections with jurors.
In states like Alabama, where the law traditionally favored defendants due to strict contributory negligence rules (which can bar recovery if a plaintiff is even 1% at fault), plaintiff firms have adapted by focusing on proving “wantonness”—a conscious disregard for safety. This strategy not only sidesteps the contributory negligence defense but also opens the door to uncapped punitive damages, fundamentally altering the risk calculus for defendants and their insurers.
The insurance industry, in turn, is scrambling to keep up. Liability insurance rates rose by 9% in the final quarter of 2025, with general liability rates spiking by as much as 30% or more, according to Marsh. Insurers are also tightening their belts, placing hefty exclusions on coverage for sexual abuse, firearms, and animal attacks, and refusing to cover properties with high crime scores—typically anything above 30 on a 0-100 scale. “We can’t do half the job,” said Rick Lindsey, CEO of Prime Insurance Co. “We can’t take the cream and leave the crap for you to deal with anyway, because it feeds the litigation machine.”
For property owners, especially smaller operators, the options are shrinking. Many are forced to seek coverage from the surplus lines market, which offers specialized liability insurance at higher premiums and deductibles, often with more exclusions. “We’ve made a choice to, perhaps, pay on the higher end of premium to limit those exclusions and those problematic endorsements as much as possible,” Sotnikoff told Bisnow. “We have a large portfolio, we have some negotiating leverage. Smaller owner-operators of real estate don’t have that leverage.”
Meanwhile, the overall property insurance market offers little relief. After a hurricane-free 2025, property insurance rates actually declined by 8% in the U.S.—but experts warn that just a handful of major natural disasters could send rates soaring again, compounding the pain of already rising liability premiums.
The ripple effects of this new legal and insurance reality extend far beyond balance sheets. Defense counsel and in-house lawyers are being urged to rethink their playbooks, investing in early, aggressive investigations, retaining expert witnesses from the outset, and working to “humanize” corporate defendants in the eyes of juries. At the same time, legislative pushes for tort reform are gaining momentum in states like Alabama, as business and insurance interests seek to rein in runaway verdicts and restore some predictability to the system.
“Landlords are taking on a lot more risk than they ever have, and they are not set up to do so,” said Danielle Lombardo, co-leader of real estate practice at Howden Insurance, in an interview with Bisnow. The stakes are clear: those who adapt to this high-stakes environment—whether by prosecuting or defending complex claims—will shape the future of the legal and insurance markets for years to come.
As lawsuits multiply and jury awards climb ever higher, it’s clear that the era of easy risk management for property owners is over. In this new world, vigilance, adaptability, and a willingness to invest in robust defense strategies are not just advisable—they’re essential for survival.