2026
How Nuclear Verdict Trends Are Driving Liability Insurance Costs in Multifamily
You didn’t file a claim. Your liability renewal still jumped. Part of the reason is a lawsuit you had nothing to do with, in a courtroom you will never see.
A “nuclear verdict” is a jury award of $10 million or more. They are no longer rare, and they are reshaping what carriers charge you for general liability (GL) and umbrella coverage. Here is what the numbers say, how it lands on multifamily, and who actually benefits when your renewal goes up.
The scale of the problem
190 verdicts of $10 million or more against corporate defendants in 2025, totaling more than $25.6 billion. That is a 40.7% increase over 2024 and a record, according to Marathon Strategies (August 2026). More than 40 topped $100 million. Marathon tracks all industries, not only multifamily.
57% growth in U.S. liability claims over a decade that Swiss Re Institute attributes to social inflation, meaning claims rising faster than economic inflation can explain.
GL rates up 3% to 8% nationally and 10% to 20% in high-litigation states like Florida, New York, New Jersey and California, with umbrella pricing up 8% to 15%, according to ApartmentInsured’s 2026 mid-year report.
Pull those together and the pattern is clear. As Insurance Journal reported on a recent Advocate Technologies rate analysis, multifamily liability pricing is tracking lawsuits.
For the wider picture of what has pushed multifamily insurance costs up since 2021, start there.
Why verdicts have become nuclear
Nobody has one clean answer, but the same drivers keep showing up.
Litigation funding
Third-party litigation funding means outside investors finance a plaintiff’s case in exchange for a share of any recovery. Swiss Re lists it as one of the non-economic drivers of liability claims growth, and notes it can lengthen cases and raise legal costs. A funder has a financial reason to keep a case going.
Jury strategy and advertising
Swiss Re also points to psychology-based strategies by the plaintiff bar, data analytics, and digital advertising. Marathon adds rising corporate mistrust and changing jury demographics. Put simply, juries are being asked to send a message, and many are doing it.
Where the case is filed
Where a case is tried matters. In Marathon’s 2025 data, the top states by verdict dollars were Georgia ($4.9 billion across 10 cases), Texas ($3.4 billion), California ($2.6 billion), Florida ($2.5 billion) and Maryland ($1.7 billion). Those totals include products-liability cases that have nothing to do with apartments. But The Baldwin Group reports that GL and umbrella capacity for multifamily is tightest in Florida, Georgia and other litigation hotspots, where some insurers have cut limits or left multifamily GL entirely.
How it lands on your property
The claims keeping carriers up at night in multifamily:
Negligent security. Baldwin reports rising frequency and severity of weapon and assault-related claims, including at properties with cameras and gated access.
Maintenance and habitability. Mold, fires and lack of maintenance have drawn large awards, according to the Insurance Journal reporting.
Slip-and-fall and other premises claims. Baldwin says severity keeps escalating.
Then the knock-on effects hit your NOI:
Carriers are cutting per-risk umbrella limits. ApartmentInsured reports many have gone from $25 million to $10 million or $15 million, so you may be stacking layers across carriers.
Baldwin says self-insured retentions of $25,000 to $100,000 are now common for larger portfolios and adverse loss history. That is your cash, out first.
Lenders want more. Howden’s Danielle Lombardo wrote in Commercial Observer that owners report lenders asking for reserves of $250,000 or more for each excluded exposure.
That is your cash flow, not an abstract trend.
If you own affordable housing, we also wrote about crime scores and the CARES Act.
Who benefits when your renewal goes up
Ask the uncomfortable question. When the verdict environment gets worse, the carrier raises its rate, trims your limits and adds retention. You absorb it. And in a year when your claims stay low, the money you paid and did not use goes to the carrier and its shareholders.
You can’t stop a jury from awarding a nuclear verdict. You can decide who keeps your premium dollar. If you want to see how the carrier’s side of the math works, read how much profit your carrier makes on your portfolio.
What a captive changes, and what it doesn’t
A captive is an insurance company owned by the people it insures. Insur3Tech brings that model to real estate owners. Most captives ask for a $1M+ minimum. We have no minimum premium. There are no holdout periods. The entire program is reinsured, so you carry no downside risk. Your premium comes back to you. We are built for every portfolio size and asset type, and we insure 100,000+ doors.
Here is what we are not telling you. A captive does not make a nuclear verdict go away, and we are not telling you to drop your umbrella or cut your limits. Talk to your broker and your lender before you change any coverage they require. For how reinsurance and stop-loss protect owners, we have the plain-English version.
Three questions for your broker this week
What was my GL and umbrella change, and what reason did the carrier give?
Did my retention or umbrella limit change at this renewal?
Which exclusions does my lender require me to fill, and what is that costing me?
Your answers tell you how much of your NOI is going to a courtroom problem you did not create. If you want a plan to protect your NOI from rising insurance costs, that is a good next read, and why multifamily insurance costs are exploding covers the bigger picture.
Want to see where your renewal money is going? Book a free discovery call and we will run the math on your current insurance spend with you.
