Liability is the fault line running through the US commercial insurance market in mid-2026. Most lines have softened, but social inflation is keeping casualty conditions hard even as buyers gain ground elsewhere – and cutting across the entire line-by-line picture is an AI exposure that does not respect class boundaries. Lockton’s July 2026 Market Update attributes buyer-friendly conditions broadly to strong insurer profitability, abundant capital and growing carrier competition, but identifies AI-related liability, fraud, bias and governance as areas where underwriting scrutiny is rising and coverage terms are being reevaluated across multiple lines simultaneously. The Insurance Services Office introduced new AI-related exclusions at the start of 2026, and several large underwriters have since added similar provisions to corporate policies over concern about systemic losses from AI failures and deepfake-enabled fraud. The report cautions that macroeconomic pressure, geopolitical instability and AI exposures could erode buyer-friendly conditions faster than many buyers anticipate.
Liability keeps buyers on edge as commercial market softens
