Landlords Are Being Sued More Than Ever, Pushing Liability Insurance Up

When Aron Sotnikoff got a letter from an attorney seeking a payout for an apartment tenant who slipped and fell in standing water at one of his firm's properties, he immediately checked the security footage to review the incident.

Sotnikoff, the director of risk management for development and asset management firm Time Equities, was bewildered watching the tenant walk by a puddle, then walk back up a staircase before returning to walk straight through it.

“This person didn't even have the good sense to actually fall,” said Sotnikoff, who is in charge of acquiring the insurance for the company’s 43M SF of commercial real estate.

“Did I miss something? Is this for real?” he said of his initial reaction to reviewing the tape. “Then there's that second reaction that is like, ‘Oh, here we go again.’”

Time Equities has fielded more and more of these claims in recent years, resulting in its umbrella and excess insurance premiums quadrupling since 2020, Sotnikoff said.

Commercial property owners across the country are grappling with rapidly rising premiums for and decreasing availability of liability insurance coverage on their properties. 

Insurance experts attribute the increasingly volatile market to the uptick in lawsuits filed against landlords and property owners, higher jury awards and a multimillion-dollar push from personal injury firms to market their services.

“We are already well known to be one of the most litigious, if not the most litigious, society in the entire world,” Sotnikoff said. “I do think it's increasing.”

Federal tort cases increased by 20% between 2022 and 2024, Risk & Insurance reported. Premises liability claims jumped from 4,516 cases in 2022 to 5,632 cases in 2024.

The severity of general liability claims on commercial properties has risen 57% in the last 10 years, according to The Baldwin Group. The most common suits that landlords face are slip-and-fall accidents, elevator and escalator accidents, toxic exposure, and wrongful deaths due to negligent oversight.

“Years ago, a sprained ankle would be $50K. Now, it's $1M,” USI Insurance Services Executive Vice President Christine Chipurnoi said. “The numbers are staggering as to what's coming through, and the court systems are really, really tough.”

There has also been an uptick in events such as mass shootings, which have doubled in the last 10 years, contributing to an increase in “nuclear claims” — a jury verdict or settlement that equals or exceeds $10M.

The number of premises liability or negligence verdicts exceeding $10M rose by 52% in 2024 compared to 2023, according to a 2025 Marathon Strategies report.  

“Insurance is risk sharing, so everyone participates,” Chipurnoi said. “If the insurance company has a bad loss experience overall, they're going to increase the rates on their whole book.”

Personal injury law firms are capitalizing on the opportunity by leveraging aggressive marketing tactics to drive more claims.

Morgan & Morgan, the largest personal injury law firm in the country, spends $350M annually on advertisements across hundreds of billboards along highways in major metros and cable TV commercials.

Morgan & Morgan did not respond to a request for comment.

“The industry of plaintiff lawyers is growing, and so their visibility to people who might be looking for these opportunities to capitalize on either nonexistent or minor injuries is definitely growing,” Sotnikoff said.

To weather the increase in claims, insurers have ratcheted up the cost of premiums. The rate of liability insurance rose by 9% in the final quarter of 2025, even as overall insurance rates fell, according to Marsh. General liability rates rose by up to 30% or more in the fourth quarter.

On top of raising their rates, insurers are placing hefty exclusions on what they are willing to cover — including sexual abuse, firearms and animal attacks, said Danielle Lombardo, co-leader of real estate practice at insurance consulting firm Howden Insurance.

But some insurance experts say excluding aspects of coverage and introducing more layers of policies can actually have the opposite effect.

“We can't do half the job,” said Rick Lindsey, the CEO, president and chairman of specialty liability insurance company 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.”

Many carriers won’t cover a building at all if its crime score, which entails a zero-to-100 index based on incidents ranging from robbery to homicide, is above 30, Chipurnoi said.

Chipurnoi and Lombardo said investigating the types of crimes in the area and utilizing security measures at a property can help pull down premiums for their clients.

“It's just this dance that we're doing, but, ultimately, the solution is to focus on controlling the controllables,” Lombardo said. “Storytell and use the analytics to help you vet your current and future exposure.”

But if they are unable to do so, or a carrier excludes certain types of liabilities, landlords can essentially be left exposed unless they seek coverage from the surplus lines market, which offers specialized liability coverage in areas of high-risk exposure at a higher premium and deductibles and 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,” Time Equities' Sotnikoff said. “We have a large portfolio, we have some negotiating leverage. Smaller owner-operators of real estate don't have that leverage.”

Overall property insurance declined 8% in the U.S. in the fourth quarter after a hurricane-free 2025, according to Marsh. But the market is a handful of large natural disasters away from hardening up again, which would make soaring liability rates extra painful.

“Landlords are taking on a lot more risk than they ever have, and they are not set up to do so,” Lombardo said.