Some real estate insurance buyers are struggling to obtain adequate liability coverage for assault and violent crime exposures as increasing claims have prompted insurers to restrict coverage.

Not all commercial general liability policies cover assault and battery, so businesses should be strategic in how they manage such risks and structure their casualty insurance programs, experts say.

Insurers are narrowing their appetite for certain risks and in certain jurisdictions, said Caitlin Scifo, New York-based U.S. real estate and hospitality casualty leader at Marsh.

Multifamily properties and retail and hospitality businesses, which tend to experience high levels of third-party traffic, are seeing more challenging placements related to violent crimes, such as assault and battery, she said.

“You’re seeing changes overall in limit deployment, program structure, as well as coverage that’s offered,” Ms. Scifo said. The most challenging jurisdictions for claims are California, Florida, Georgia, Illinois, New York and Texas, she said.

Settlement amounts are increasing, which has led to higher rates, especially for accounts with substantial habitational exposure, said Thomas Pipala, New York-based senior vice president and Northeast real estate practice leader at Lockton.

Policyholders with significant past claims are seeing high-single-digit to mid-double-digit rate increases, he said. Insurers also are paring back umbrella/excess limits because of an increase in large losses, he said.

Even for accounts with no losses, insurers are curbing capacity, reducing previously quoted $25 million layers to $10 million to $15 million, Mr. Pipala said.

Securing adequate limits for assault and battery, sexual abuse and molestation and firearms risks is a major challenge, said Adam Lowe, Dallas-based principal and senior vice president at Brown & Riding.

“It’s not that you can’t get this coverage, but you can’t get it on every single risk,” he said.

Multifamily apartment complexes are particularly difficult, depending on the tenant makeup and venue, Mr. Lowe said.

“Any premises operations-driven real estate deal is not a simple placement,” he said.

Lenders are requiring full coverage for assault and battery, sexual abuse and molestation, but insurers are reluctant to offer such terms, he said.

Insurers are scrutinizing geographical risks, crime scores, loss history, security and risk management.

A typical single-location habitational account “is going to have some sort of sublimited assault and battery, (sexual assault and molestation), firearms coverage, or it’s going to be excluded,” Mr. Lowe said.

“If we’re going to move forward in accepting sublimits, what our clients really need is a sublimit that matches the general liability limit, which is $1 million occurrence, $2 million aggregate,” said Dan Brown, San Francisco-based senior vice president within Alliant’s real estate and hospitality vertical.

Anything less than that likely would not be covered in the excess or umbrella tower, because excess insurers typically do not drop down to lower than the minimum primary general liability limits, he said.

“That’s created a lot of friction, especially when GL carriers are either looking to outright exclude the coverage, or if they’re willing to offer a much lower sublimit of call it $250,000 or $500,000. It’s providing some coverage for our clients, but it’s not giving the full coverage of the entire excess limit,” he said.

Insurers are becoming more selective about when and where they’re willing to deploy full limits for assault and battery and sexual abuse and molestation risks, said Joey Shapiro, Chicago-based executive vice president at Amwins.

“In certain circumstances, you may have to pay a surcharge on a specific risk in order to obtain that kind of coverage, or look at a different attachment point,” Mr. Shapiro said.

Mid- to large-sized real estate portfolios — 2,500 to 5,000 units — now face deductibles or self-insured retentions of $50,000 to $100,000 or more for full coverage, compared with $5,000 to $25,000 previously, according to an Amwins report issued in July.

“Coverage really starts to open up once you exceed a $50,000 or $100,000 self-insured retention,” Mr. Shapiro said.

The goal is not to have a sublimit and to focus on how much the client needs to retain to include the coverage, Marsh’s Ms. Scifo said.

“In certain jurisdictions, a normal demand for a shooting could be $20 million to $50 million. We really look at what the client can retain based on their own risk tolerance as well as their lender obligations, and how we can evolve the program to get the broadest coverage possible,” she said.

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Owners mull strategies

Consolidating portfolios, reviewing retentions and prioritizing risk management strategies can help real estate owners and operators negotiate improved coverage terms and conditions.

“There are many different levers we can pull,” said Joey Shapiro, Chicago-based executive vice president at Amwins.

Analyzing crime score data for each location and applying specific deductibles or retentions for certain coverages are among the options to explore, Mr. Shapiro said.

Underwriters are paying close attention to safety measures at different locations, such as video surveillance, 24-hour exterior lighting, controlled access to buildings and security protocols, he said.

“Securing the lead $10 million limit on any given portfolio in real estate is the most challenging,” as fewer insurers are willing to put up that limit, said Dan Brown, San Francisco-based senior vice president within Alliant’s real estate and hospitality vertical.

“We look at various ways to put that puzzle together. If we find that a $1 million excess of the primary GL and auto helps from a premium and coverage standpoint rather than finding a lead $5 million, we’ll build it in a way that is the most cost-effective for our clients,” he said.

For larger portfolios, a risk purchasing group can be a cost-effective solution, he said. “When our clients need to buy at least $25 million of limit, we always entertain risk purchasing groups,” he said.

Consolidating multiple properties into a larger portfolio under a master program is the easiest way to “open up the carrier pool and increase competition within the marketplace,” said Adam Lowe, Dallas-based principal and senior vice president at Brown & Riding.

Creating a tiered program where safer locations get full coverage while higher-risk locations may have sublimits is another way to secure comprehensive coverage, Mr. Lowe said.