There are liability trends that every small business owner should keep an eye on. Click here to find out what they are in 2025.
In the world of liability, there are certain trends that come and go. Some are driven by changes in legislation, others emerge from shifts in technology.
The point is that the world is constantly shifting, so as a business owner, it’s your responsibility to keep an eye on these trends and ensure that your coverage and compliance are relevant.
So what are the liability trends every small business owner should watch in 2025? We’re going to look at the 5 most important, giving you all the information you need to assess your business properly and change your strategy if need be.
Article Breakdown
A Rise in Casualty Insurance Costs
The first trend to mention is the rising casualty insurance costs and coverage restrictions. With the US commercial liability insurance sector facing challenges due to a surge in claims, small business owners are seeing higher premiums and more policy exclusions as a result.
According to a recent study, for instance, casualty insurance premiums have increased for 23 consecutive quarters, with an 8% rise in early 2025.
That’s not to say you can’t still access tailored liability coverage that fits your budget – whether that’s general commercial liability insurance for third-party injuries, or professional liability coverage for the services you provide, but it’s up to you to find a provider that specialises in small business insurance, helping you navigate those rising premiums.
Increased Exposure to AI Liability
Businesses also face an increased exposure to AI liability. A recent survey found that over 80% of US business owners are concerned that their insurance may not cover specific losses related to AI, and with the integration of AI and other digital technologies becoming more common, it’s a serious threat that you need to address proactively.
Whether it’s mistakes made by AI-powered tools or reliance on algorithmic decision-making, it’s your job to ensure your liability coverage accounts for AI-related incidents and protects your business as the tech continues to play a larger role.
Legal System Abuse
Going back to the rise in premiums, many insurers have attributed this to increasing litigation, including cases related to data privacy and consumer protection. Excessive lawsuits have driven up claims costs, which in turn pushes some insurers to raise premiums or restrict coverage.
Again, there are still insurers out there that offer affordable, tailored coverage options, but in terms of the legal system, it’s also on you to maintain strong compliance practices and document your processes carefully, ensuring you don’t become a part of the problem.
Supply Chain Disruptions
The 2025 Gallagher Business Owners Survey has highlighted supply chain disruptions as a growing concern. Indeed, across the US, many businesses are feeling the effects of tariff changes and labour shortages, and if you don’t have the right liability and business interruption coverage in place, you might be affected by it.
Delays, damaged goods, or general supplier failures can easily impact your ability to deliver products or services on time, so make sure your policies account for these risks and keep your business resilient while the problem is ongoing.
Cyber Liability Expansion
Lastly, as small businesses rely more on digital operations, cyber liability claims are increasing. As a result, coverage now often extends to data breaches, ransomware attacks, and numerous other incidents that you might not have in your policy.
With this in mind, it’s crucial to ensure your insurance includes all the latest cyber risks and emerging threats, as you don’t want to go through something like that, only to find your policy hasn’t been updated.
Conclusion
These are just a few of the liability trends to bear in mind, but there are many more to be aware of. The key thing is that you’re doing your research and staying proactive about how your coverage is affected.
By keeping an eye on emerging trends, you can gain a clearer picture of where your coverage is lacking and what needs to be done to build your defences as high as possible. From there, you can continue to operate with peace of mind, knowing that you’re prepared for any liability challenges that come your way.
