Hospitality Insurance Market 2026: Why Carriers Are Calling Us Again
When insurance carriers start calling us out of the blue, I know what it means. The market is starting to soften, and they want business.
That has been happening lately. Underwriters are reaching out unprompted, asking what is on our desk. We have been in hospitality insurance for over 30 years, and we have seen this before. Insurance moves in cycles, and this is what the turn looks like from the inside.
Here is the part most agents won't say out loud. New markets are entering the space and some rates are coming down. At the same time, claims keep getting bigger. Both are true, and nobody knows which one wins. So let me walk you through what I am seeing in the hospitality insurance market, what the numbers say, and what to do before your next renewal.
What a Soft Insurance Market Means for Your Bar or Restaurant
Insurance pricing swings between two moods.
Hard market: carriers lose money, pull back, raise rates and get picky about who they will write.
Soft market: carriers make money, new capital shows up, and everyone competes for the same accounts. Rates drop and terms loosen.
Right now the broad commercial market is soft. The Council of Insurance Agents & Brokers found average premiums fell 2.0% across all account sizes in the second quarter of 2026. The quarter before was the first across-the-board decrease since 2017.
I get it, that sounds like good news. Read one line further, though. Large accounts dropped 3.7%. Small accounts dropped 0.5%. Most independent bars and restaurants are small accounts. The relief is real, but it is landing on the big operators first.
Where Hospitality Insurance Rates Are Coming Down
Two parts of your program are getting cheaper.
Property. IMA's 2026 hospitality market update puts property with a clean loss history down 5% to 10%, and catastrophe-exposed property down 15% to 20% or more. The CIAB survey agrees: property fell 6.3%, the biggest drop of any line, and 75% of brokers surveyed reported more capacity.
Workers' compensation. IMA has it down 5% to 10% for accounts with good loss history. CIAB counts 18 straight quarters of decreases.
Why now? IMA says many insurers missed their growth targets and are chasing new business to make up ground. Its hospitality lead told Insurance Business that a strong 2025 loss year pulled new capacity and capital back into the sector. That is why my phone is ringing.
Why Liquor Liability Insurance Rates Aren't Following
Now look, I am not going to lie to you. The softening has not reached the part of your policy that hurts the most.
The same IMA report shows liability heading the other way.
Coverage - 2026 rate direction
General liability, good loss history - Up 5% to 15%
General liability, poor loss history - Up 15% to 30%
Umbrella and excess liability - Up 10% to 20%
IMA calls liquor liability one of the tightest coverage areas, with minimal relief ahead. Standard carriers often step back once alcohol passes 25% to 30% of your sales. For a bar or nightclub, that is every one of you.
It gets worse by state. Independent Agent magazine reported in August that premiums in some states have jumped 300% to 600%. Neighborhood bars have gone from $5,000 to $50,000 or more, regardless of their claim history.
Nuclear verdicts are driving bar insurance cost
The reason is claims. In 2025, a Georgia jury awarded $66.575 million to the family of a student shot and killed at a nightclub. One verdict like that changes how every underwriter prices a venue with a dance floor and a door.
Juries have changed too. A Swiss Re study cited by IMA found only 56% of people surveyed think there are too many lawsuits, down from 90% in 2016. Umbrella premiums have now risen 35 quarters in a row. That is almost nine years.
Dram shop laws decide how bad it gets
Dram shop laws let an injured person sue the business that served the drinker. Forty-three states have one. Where you operate matters as much as how you operate. An underwriter at Admiral told Independent Agent that results are favorable in California and unfavorable in South Carolina, Arizona, Oregon and Texas.
Some states are fixing it. South Carolina's reform took effect January 1, 2026. A defendant found less than 50% at fault now pays only its share. Alabama's 2023 law requires proof that you knowingly served an intoxicated patron. Reform helps, but slowly. South Carolina owners told local news this summer they are still struggling with costs.
New Hospitality Insurance Carriers Are Entering the Market
New players are showing up. AMWINS, one of the big wholesale brokers, launched a dedicated hospitality practice in February and described the sector as more complex and competitive. In July, the South Carolina Bar and Tavern Association partnered with a newer program that already insures nearly 40 venues in the state. One Columbia owner told WIS his premium climbed from $5,800 to a peak of $41,400. He now pays about $25,000 through the new program.
More options are good for you. Here is the catch.
Liquor claims have a long tail. A fight outside your door this Saturday might not become a lawsuit for a year or two. A new carrier can price cheap today and not find out what it bought until later. I have seen markets come in hot, get buried in claims on a book they thought was clean, and then either jack up rates or leave the class. When that happens, you are the one shopping in a hurry with a non-renewal on your record.
So before you take the cheapest quote, ask four questions.
How long has this carrier written liquor liability?
What is its AM Best rating?
Is assault and battery covered in full, capped at a lower limit, or excluded?
Are defense costs inside the limit or on top of it?
A policy that is $3,000 cheaper and excludes assault and battery is not cheaper. It just has not been tested yet.
How to Get Better Restaurant and Bar Insurance Rates Right Now
Carriers are competing, but only for accounts that look good on paper. Make yours one of them.
Pull five years of loss runs. IMA notes several insurers now require a five-year loss history, even for years before you ran the location.
Document your alcohol training. Certificates, dates, names. Training nobody can prove does not count.
Tighten security and keep records. IMA notes that assault and battery exclusions are often tied to security protocols: staffing, surveillance and incident response. Keep an incident log.
Report sales accurately. Your premium is based on sales, and the carrier can audit you. Lowball the number and you get a bill at audit. Worse, the underwriter stops trusting you.
Start 90 days out. Good submissions take time. Last-minute ones get last-minute pricing.
Why Carriers Call a Specialist Agency First
So why do carriers call us? It is not because we are charming.
A carrier wants three things from an agency. It wants a book of business that does not lose money. It wants people who know the class. And it wants applications it can believe.
Hospitality has been our focus for more than 30 years. Our loss ratio, meaning claims paid compared with premium collected, stays low because we are careful about who we bring to a carrier. We look for owners who are serious about their business. They train their staff, keep the cameras running and fix the parking lot before somebody falls in it.
That matters to you. When an underwriter sees a submission from an agency whose accounts perform, yours gets read differently. That works in a soft market, and it keeps working when the market turns hard again.
The Bottom Line on the 2026 Hospitality Insurance Market
The market is softening, but unevenly. Property and workers' comp are down. General liability, umbrella and liquor liability are still climbing in most places. New carriers are arriving, and not all of them will stay. Claims are the wild card, and nobody, including me, knows how that plays out.
What you can control is how your business looks to an underwriter and who is presenting it.
Next step: If your renewal is within 90 days, or you are holding a quote that looks too good, contact KEL Insurance Services for a quote or a coverage review. We will tell you what we see, including when your current policy is the better deal.