Liability Insurance Is Becoming Landlords' Most Expensive Problem

Landlords are being sued more than ever, and the insurance market is making them pay for it twice.

Nina Dale
April 14, 2026

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Good morning. Liability premiums jumped 30% last quarter, and the litigation wave driving them shows no signs of slowing down. For commercial landlords, it's not just the lawsuits — it's who's funding them.

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🎙️ This week on No Cap—Jack and Alex sit down with Chris Hentemann (Founder & CIO, 400 Capital) to break down how structured credit works, where capital is flowing, and why the biggest opportunities often emerge from market dislocations.

CRE Trivia 🧠

What is a "nuclear verdict" in commercial real estate litigation?

(Answer at the bottom of the newsletter)

Market Snapshot

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Liability Crisis

Liability Insurance Is Becoming Landlords' Most Expensive Problem

Frivolous or not, every lawsuit costs something, and after years of nuclear verdicts and aggressive plaintiff marketing, commercial property owners are getting the bill.

Premiums are spiking: General liability rates rose as much as 30% or more in Q4 2025, even as overall property insurance fell 8% following a quiet hurricane season, per Marsh. The divergence reflects a structural shift in how insurers are pricing litigation risk. For firms like Time Equities, which manages 43M SF of CRE, umbrella and excess premiums have quadrupled since 2020.

The numbers behind the verdicts: Premises liability claims climbed from 4,516 to 5,632 cases between 2022 and 2024, and claim severity has risen 57% over the last decade, per The Baldwin Group. Nuclear verdicts — settlements exceeding $10M — rose 52% in 2024 alone, per Marathon Strategies. A sprained ankle that once settled for $50K now runs $1M.

Source: Marathon Strategies

A $350M ad machine: Morgan & Morgan, the country's largest personal injury firm, spends $350M annually on billboard and cable TV ads across major metros. The result is a feedback loop: more marketing drives more claims, more claims harden the market, and every landlord pays regardless of their actual loss history.

Coverage left behind: Insurers are attaching exclusions for sexual abuse, firearms, and animal attacks, while refusing to cover properties with crime scores above 30, per Howden Insurance's Danielle Lombardo. Landlords shut out of standard markets get pushed into surplus lines — higher premiums, steeper deductibles, and fewer protections — with smaller owner-operators bearing the brunt.

➥ THE TAKEAWAY

Control the controllables: Liability insurance is now one of CRE's most punishing budget line items. The pricing is structural, not seasonal, and landlords who aren't managing their crime scores and carrier relationships are leaving money on the table.

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✍️ Editor’s Picks

AI Campus: Patmos secures $100 million C-PACE loan to complete data center in downtown Kansas City, making it the largest Missouri C-PACE financing to-date. (sponsored)
War-tested resilience: Geopolitical tensions tied to Iran are injecting volatility into REIT performance, unsettling investor sentiment, and pressuring real estate stocks.
Data rewritten: Recent revisions to U.S. job data reveal a weaker employment picture than previously reported, raising concerns about underlying economic momentum.
Deliver the data: AppFolio research shows 73% of investors want AI-enabled insights. Stop manually merging spreadsheets and deliver the performance analytics your capital partners now demand. (sponsored)
Desert dilemma: Rising water scarcity concerns and local opposition are emerging as major obstacles to data center expansion across the Southwest.
Anxious outlook: Rising fears of job loss and unemployment are outpacing wage expectations, signaling growing worker anxiety despite modest confidence in finding new jobs.

🏘️ MULTIFAMILY

Midwest momentum: Indianapolis leads 2026’s top multifamily markets as investors favor stable, affordable Midwest metros alongside still-competitive Sun Belt growth hubs.
Fund fold-in: Federated Hermes is buying an 80% stake in multifamily investor FCP for up to $331M, absorbing its $14.8B portfolio.
Supply squeeze: DFW’s multifamily market is feeling rent declines as strong demand is outpaced by a surge of new supply.
Permit problem: D.C. mayoral candidates’ housing expansion plans face a major reality check as a sharp drop in permits signals weak developer and investor appetite.

🏭 Industrial

Infill expansion: Dalfen Industrial scooped up a 1.4 MSF infill warehouse portfolio for $207.5M as Mapletree continues a major U.S. asset sell-off.
Mega lease: Hyundai locked in 1.38 MSF near Chicago, anchoring a $450M, multi-site U.S. manufacturing expansion.
Onshore metals: Vulcan Elements is planning a $918M rare-earth facility near Raleigh, aiming to build a major U.S. supply chain hub outside China.

🏬 RETAIL

Store shutdowns: Apple is closing three mall stores as retail centers decline, losing tenants and foot traffic.
Membership magnet: Warehouse clubs are quickly becoming the go-to one-stop shop by winning younger and value-focused shoppers while enhancing in-store experiences.
Distress sale: Disgraced developer Bill Hutchinson sold a prime Dallas retail asset as legal troubles continue to drive a broader portfolio selloff.

🏢 OFFICE

HQ2 stall: Amazon paused hiring for high-paying roles at its Virginia HQ2, halting incentive payouts as broader restructuring slows expansion.
Flex rebound: D.C.’s coworking market is regaining momentum as demand rises, occupancy improves, and operators resume expansion after a slow post-pandemic recovery.
Amenity mismatch: Underused office amenities are becoming costly liabilities as landlords rethink designs to prioritize function and daily tenant use over flash.

🏨 HOSPITALITY

Ultra demand: Miami’s wealth surge is fueling a $1B Mandarin Oriental redevelopment, with ultra-luxury condos selling fast even before construction begins.
Upscale pivot: Wyndham is expanding beyond its budget roots into upscale and extended-stay offerings to capture shifting traveler demand and boost loyalty value.
Tech stack: Hospitality tech funding topped $1B as investors pile into PMS and AI platforms that centralize operations and power smarter, data-driven hotel management.

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📈 CHART OF THE DAY

Cross-border CRE capital is shifting away from the U.S. toward the U.K., driven by declining foreign investment, especially from Canada.

CRE Trivia (Answer)🧠

A jury verdict or legal settlement that equals or exceeds $10 million. Premises liability cases resulting in $10M+ awards rose 52% in 2024 compared to 2023.