From regulatory standards to liability risks to economic factors, navigating the insurance market is complex for property managers, building owners, and residents alike. Though pricing increases have slowed since 2021-22, premiums are still on the rise as insurers aim to remain profitable while seeking a balance that accurately reflects risk and considering compliance regulations, weather exposures, and liability claims.

“Industry-wide losses in 2025 have calmed down a bit,” says Todd Ross, managing director of One Point Insurance Brokerage, LLC in New York. “There haven’t been any single or major catastrophic losses in the past year. It seems as though the industry is taking a wait-and-see approach to find out if the new underwriting pricing is capturing emerging risks, like natural catastrophes including wildfires, convective storms, hail, and water-related damage.”​

The Cost of Risk​

Current risks on the radar for insurance carriers are buildings that are wind and/or catastrophe (CAT) exposed (particularly those on the water) as well as buildings that have had severe claims (particularly around construction labor law) those entering into large capital improvement projects where they may be exposed to such claims, and those with ‘habitational risks’, which include multifamily, co-ops, condos, and HOAs. “The market is still pulling back and reassessing its overall appetite,” says Ross. “There’s been a tightening of terms for overall habitational risk.”

These risk factors directly impact what insurers call the ‘price of risk’—the cost and terms of coverage for a given building. When buildings are in a distressed condition for any reason, insurance costs can skyrocket, and the terms and conditions offered may not even address the concern that prompted the carrier’s intervention in the first place. “For example,” says Ross, “if a building has a labor law claim, a new carrier may look at that and offer to charge three to four times the amount of previous years’ premium—and they may also exclude the labor law coverage, so you end up paying more for less coverage.”

Property and liability are two distinct coverages that protect against different exposures, Ross continues. “There’s a term in the industry that ‘frequency breeds severity’,” he says, meaning that frequent small claims may be a precursor to a bigger claim down the road. Small water leaks can escalate to a broken pipe or lead to a mold issue, for example; minor pest complaints can worsen into a large infestation; loose railings or paver stones can create trip-and-fall hazards, leading to injuries and costly claims.​

“Labor law claims have been the largest in terms of liability and slip-and-falls, especially from sidewalk hazards,” says Ross, adding that there are simple steps buildings can take to mitigate the risk. “Routine maintenance goes a long way—maintenance logs, weekly walkthroughs of the interior and exterior to make sure there’s no graffiti, no leaks, no trip hazards, that signs are all illuminated, exit signs are working, there’s a snow procedure, as well as taking pictures and noting repairs so the general public knows not to walk on wet areas or trip hazards.” Proactive, documented risk mitigation goes a long way toward avoiding deferred maintenance related to liability claims.

Ross continues, “We have a handful of clients who are getting crushed with ‘nuclear’ verdicts—some $20 million-dollar [judgments] for claims they really have no negligence for. Juries, rightfully or wrongly, go to the deep pockets, and it can be easy to say that it’s only an insurance company, so the impact isn’t as great. It may not impact the industry as a whole, but it will certainly affect the specific co-op or condo that ends up paying more in premiums over the next five or seven years.”​

Local Law Requirements

Property managers, owners, and by extension insurance brokers and insurance carriers, spend a lot of time wading through the complex web of compliance requirements. Whether it’s Local Law 11 governing façade work or installing gas meters, measuring energy consumption, or making sure handrails are correctly installed and sidewalks properly maintained, code compliance requires time to collect the proper information and then act to get square with the law. Insurance companies also issue their own set of recommendations that must be complied with—not only for local laws, but also for their unique underwriting guidelines, which often dovetail with those laws.

The amount of time property owners and property managers dedicate to the entire insurance process has risen significantly. Every year, it becomes more difficult for each party to ensure every entity is in compliance with all local laws in a timely manner. “It’s a massive burden,” says Ross. “I’d say 30-40% of our time now is spent making sure recommendations are followed, carrier compliance is met, and insurance contracts and insurance policies coverage and terms are proper for general contractors that are hired.”

“Local Law 11 makes sense from a safety perspective,” he continues, “but when you look at it in light of Labor Law 240 and 241—the strict liability around falls from heights—it becomes a massive undertaking. We are getting involved in deep contract reviews with architects, engineers, and attorneys, making sure the general contractors have the proper coverages that will extend to the property owner so there is adequate risk transfer.”​

Proper Coverage​

The process of assessing coverage for a multifamily community includes a contract review, an insurance policy review, and a cost analysis to help the board or property owner hire a general contractor with proper coverage and adequate limits. On average, properly covered contractors can cost 40% and 80% more than contractors without proper insurance. The only way to ensure proper coverage is to read the general contractor’s policy.​

“You can imagine a condo board having two different contractors and seeing the varying prices. If the lower-cost one doesn’t have the right insurance and you think ‘Well, what’s the risk?—it could be multimillion dollars in uninsured damages,” says Ross. “That drives up costs for everyone and can lead to massive delays in trying to find a proper contractor with the right insurance coverages who can do the work when needed”.

“Working with architects and engineers, making sure the insurance language and procurement are proper for any general contractors that may be hired takes time, energy, and resources for a law that is collectively unfairly burdensome because [property owners] have no control over site safety and operations of a contractor that they hire, so it’s not a great law.”

Working Together​

Just as it is with any other vendor or service provider, good communication is very important between property management, boards, residents, and their insurance team. “We don’t like calling ourselves brokers,” Ross notes, “because it sounds transactional. We provide counsel on insurance-related topics.” In New York City, the insurance marketplace isn’t hypercompetitive. A solid collaboration between all the stakeholders in the insurance decision making and buying process can keep everyone informed, educated, and mitigate cost surprises.

“Boards have to be judicious in their expectations and trust their experts,” says Ross. “Following the proper process over time allows the benefits of minor improvements and risk mitigations to compound. Getting into the habit of documenting, logging actions, and having evidence to defend a claim when it occurs can reduce the frequency or severity of claims, which positively impacts premiums. We are all subject to the global insurance market, but a building’s specific risk profile matters.”

What’s Down the Road​

Looking ahead, technology, inflation, and legal matters will play a factor in the insurance landscape. Technology is changing the industry, making it easier for companies to gather various types of granular data that will impact underwriting in ways never seen before. Ross notes that “pricing will continue to reflect both your exposure and incorporate many other factors the insurance company will be able to synthesize in understanding your exposures, and not just look at the number of claims you have had in the past 5-7 years.”

 Inflation continues to ripple across the city and the country as a whole, impacting replacement costs, materials, and labor–and subsequently insurance pricing–until the economy figures out where inflation will settle. Additionally, Ross says tort reform is another factor affecting insurance pricing. “The tort reform, or lack thereof, in New York is absolutely impacting insurance pricing in a negative way. Look at the tort reform in Florida, where it’s benefited the market in a positive way,” he says. “Here, without tort reform, we will continue to see elevated liability premiums with insurance carriers opting out of writing New York State-related risks, while imposing stricter liability and umbrella underwriting standards.”

 All these factors impact property owners’ ability to secure liability and umbrella liability coverage and high limits while affecting a contractors’ ability to get reasonably affordable coverage. “We’re seeing a lot of smaller contractors unable to compete due to insurance pricing, but coverage is so important. The last thing you want to find out is what you don’t have after a loss in terms of coverage,” he says. Being proactive, mitigating exposure, documenting everything—and working closely with insurance teams—is the best defense for boards and managers to help hold down unpredictable premiums and lower the number of routine claims. 

Kate Mattiace is associate editor of CooperatorNews