R
eal estate insurance buyers are facing challenges in obtaining adequate liability coverage for assault and violent crime exposures due to increasing claims. Insurers are restricting coverage, narrowing their appetite for certain risks, particularly in high-crime jurisdictions such as California, Florida, Georgia, Illinois, New York, and Texas.

    Businesses should be strategic in managing these risks and structuring their casualty insurance programs. Multifamily properties, retail, and hospitality businesses experience high levels of third-party traffic, making them more challenging placements for violent crimes like assault and battery.

    Insurers are reducing umbrella/excess limits due to large losses, leading to higher rates and rate increases of 10-20% for accounts with significant past claims. Even accounts without losses are seeing capacity curbed, with previously quoted $25 million layers reduced to $10-$15 million.

    Securing adequate limits for assault and battery, sexual abuse, and molestation risks is a major challenge. Insurers are scrutinizing geographical risks, crime scores, loss history, security, and risk management. Lenders require full coverage but insurers are reluctant to offer such terms.

    Experts recommend that real estate owners and operators consider consolidating portfolios, reviewing retentions, and prioritizing risk management strategies to negotiate improved coverage terms and conditions. Analyzing crime score data, applying specific deductibles or retentions, and implementing safety measures can help mitigate risks.

    Underwriters pay close attention to safety measures such as video surveillance, controlled access, and security protocols. For larger portfolios, a risk purchasing group can be a cost-effective solution. Consolidating multiple properties into a master program can also increase competition in the marketplace and secure comprehensive coverage.