The realities of the hard market have become a challenging issue for many insureds.

September 23, 2022 / bracketmedia

Dustin Worthman – Regional Director of Sales for Lamb Insurance Service

The realities of the hard market have become a challenging issue for many insureds.

Inflation, both economic and social, is a consistent driver of the hard market. Carriers are now grappling with higher costs to process claims, as well as higher repair and replacement costs, both of which have directly impacted insureds’ rates. However, for the human service industry, several major shifts in recent years have increased claim frequencies to levels for which carriers were unprepared.

Examples of this include the MeToo movement (a social movement against sexual abuse and harassment) and the Child Victims Act (or similar legislation). The latter effort prompted legislative changes in the statute of limitations for abuse reporting. As such, carriers were flooded with liability claims they did not anticipate, subsequently hindering capacity. Additionally, more of these cases have resulted in nuclear verdicts that have stretched carrier reserves thin. These types of societal shifts have had corollary effects on the insurance industry.

Now more than ever, carriers are seeking a thorough understanding of what an organization is doing to mitigate this broad universe of risks before making coverage available. For insureds, there is now a need to carefully demonstrate what their organization is doing to minimize their exposure in order to secure reasonable premiums, or in some cases, any coverage at all. Nonprofits and human service organizations are not immune from this reality, especially when providing programs or services where they are responsible for the care, custody and/or control of their consumers.

The following risk mitigation tips offer a guide for nonprofits and human service organizations to better respond to the difficulties related to securing liability insurance in this hard market:



Sexual abuse and molestation claims have drastically risen in frequency over the last few years. To reduce the likelihood of abuse claims, we recommend proper background checks at not only the state level, but also at the federal level. This should be done early in the recruitment process to ensure any past issues do not impact the organization. From a risk mitigation standpoint, thorough background checks prove an organization is meticulous, even at the very beginning.


The best risk mitigation strategy is consistent and effective employee training. When employees know understand their responsibilities and are aware of their organization’s safety and operational expectations, the likelihood of an incident is reduced and staff members can advocate for themselves. A regular training schedule also demonstrates to carriers that the organization values safety and proactively works to reduce the most common liability exposures.


Insurance brokers are an insureds most effective resource when it comes to navigating a hard market. By staying up to date on marketplace trends that impact rates and maintaining a consistent line of communication with their broker, insureds can avoid surprises and secure adequate coverage with competitive rates. Additionally, broker expertise is needed now more than ever with regards to strategically structuring policies in a fashion that mitigate’ s expected annual premium increases. For example, assuring blanket property coverage is in place on a total value basis, rather than having to adjust each property’s value individually each year to keep up with rising replacement costs. Similarly, by reaching out to their insurer early, insureds can get ahead of potential liability issues and brainstorm creative solutions.

Although the hard market is here for the moment, there are some signs that carrier capacity is increasing, which could lower rates down the line. In the meantime, insureds should be prepared for carriers to continue reevaluating their books of business and where they provide coverage, especially in high-risk areas. Taking just a few preemptive steps can position insureds for favorable rates while also better protecting their organization for the long term.

Let's talk

You can count on LAMB to do the right thing in support of your mission.