Commercial general liability (CGL) insurance in 2025 is has experienced some market stabilization. Evolving risk exposures, particularly around rising claims severity, tightening underwriter scrutiny, and expanding litigation risks is resulting in Captive insurance increasingly used as an alternative strategy for businesses to manage coverage gaps and exercise greater control over liability costs.
The commercial general liability marketplace has seen a moderation in premium increases, with most renewals rising between 4%–10% instead of double-digit surges common in prior years. This improved rate environment benefits many policyholders, but hard market conditions persist for sectors with high loss frequency and severity, such as construction, affordable housing, and hospitality, where carriers maintain stringent standards and selective underwriting.
Key factors shaping this market include:
Stabilizing claims performance and improved insurer financial results, which help support competitive pricing and healthy capacity.
Elevated litigation risks—fueled by social inflation, plaintiff-friendly laws, and aggressive legal tactics—drive claim costs higher and force carriers to limit terms or require higher deductibles on challenging risks.
Increase in “nuclear verdicts”, where jury awards exceed $10 million, pushing premiums up and prompting coverage limitations in some cases.
Emerging exposures such as biometric data privacy, which has prompted new exclusions and endorsements in standard CGL forms, given evolving regulations and frequent disputes over coverage for data-related claims.
To secure favorable rates and terms, businesses are prioritizing risk management, clear safety protocols, and active loss control, which are more valuable than ever in underwriting decisions.
Amid these market dynamics, businesses are increasingly leveraging captive insurance to address commercial general liability needs beyond what the traditional marketplace can offer. Captives provide more control in underwriting and claims management, allow for tailored coverage terms, and support risk retention strategies that help companies mitigate fluctuations in premium and coverage availability.
The strategic benefits of using captives for CGL include:
Customizable coverage, enabling organizations in high-risk industries to address exclusions or gaps in standard CGL policies.
Retention of premiums and improved cash flow for businesses with strong loss control and safety practices.
Access to reinsurance markets and flexibility to structure programs for new or emerging liability risks (such as biometric privacy or contractual liabilities).
Enhanced risk management culture, with direct impact on claims frequency, severity, and insurance outcomes.
Tailored to your risk tolerance, with resinaurance available to limit to captive exposure
The commercial general liability marketplace in 2025 continues to demand innovative risk management — with many organizations pursuing captive solutions and alternative risk transfer strategies to navigate tough underwriting standards, persistent litigation pressure, and evolving liability exposures. C.I. provides single parent captive solutions for nearly all trades involving CGL. Check out a couple case studies here, and here.
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