When Standard Coverage Isn’t Enough: The Expanding Role of the E&S Market in 2026

Historically, the Excess and Surplus (E&S) market was the last resort for businesses with risks no one else would insure—such as a multi-billion-dollar bridge construction project or a logistics company operating thousands of heavy trucks nationwide.

Today, E&S represents more than 12% of all U.S. commercial property and casualty premiums. It has become the market companies turn to for flexibility and speed when traditional “admitted” carriers scale back or tighten coverage. For perspective, E&S accounted for just 3.6% of the total P&C market in 2000.

Rising medical and real inflation, escalating jury awards, and reinsurance pressures have driven stricter underwriting standards. As a result, well-managed businesses and retail agents increasingly look to E&S for alternative solutions and additional capacity.

E&S carriers specialize in finding ways to cover complex or evolving risks that no longer fit neatly into the standard market. They move faster, think creatively and structure coverage that reflects the realities business owners face, not just the ones that fit on a standard form. While standard carriers must file rates and forms with each state, E&S insurers can adjust quickly as new exposures or claim trends emerge — which is exactly what today’s market demands.

As we move into 2026, understanding how to use the E&S market strategically can help companies secure the right coverage, control costs and stay ahead of emerging risks.

Trends to Watch Heading Into 2026

The E&S market has always evolved quickly, but the pace of change over the past few years has been unprecedented. Understanding what’s driving that evolution can help business owners and their brokers align expectations and make more informed coverage decisions.

1. Shrinking capacity and higher demand

Traditional carriers that once offered large limits — $25 million or even $50 million — are now cutting back to $5 million or less or are withdrawing from certain industries altogether. Construction and transportation have been among the hardest hit, especially for auto and excess liability coverage. A surge in new construction activity, fueled in part by ongoing infrastructure spending and housing shortages, has also increased the demand for limits, putting additional pressure on admitted carriers’ capacity. As a result, many accounts that once fit comfortably in the standard market now require multi-layered E&S programs to reach their full coverage needs.

What this means for businesses: Start renewal discussions early — ideally 90 to 120 days out — to give your broker time to approach multiple carriers and structure layered coverage. Businesses shouldn’t assume last year’s limits will remain available and should plan for alternatives, and work with a broker who knows how to navigate both admitted and E&S markets to build a complete solution.

2. Pressure in general liability and auto lines

Carriers have pulled back in several high-exposure casualty lines in the admitted market due to results. General Liability coverage for risks such as assault and battery has become increasingly limited, leaving apartment complexes, hotels and restaurants, especially those in high-crime areas, much harder to place. Liquor Liability has followed a similar pattern in many states, where fewer admitted carriers are willing to take on the volatility of alcohol-related claims for restaurants and bars. Commercial Auto has tightened as well, and although property conditions have improved in some segments, admitted carriers still restrict capacity for certain risks such as older buildings and coastal exposures.

What this means for businesses: Businesses in sectors facing higher liability or auto-related exposures should be prepared in case admitted carriers don’t offer the limits they need. E&S carriers can help fill these gaps by offering partial limits, buffer layers or the first piece of a larger tower, which can then be built out across multiple markets. Multi-carrier placements of three or four participants on a multi-million-dollar tower are now common. 

3. Industry exposures grow more complex

Some sectors are dealing with more layered or long-tail exposures that require specialized underwriting approaches.

• Construction: Firms concentrated in Western states where construction-defect litigation creates long-tail liability exposure are most impacted.
• Habitational: Apartment owners and multifamily operators with aging properties or high crime face growing liability concerns.
• Hospitality: Bars, restaurants and nightclubs with liquor exposure or high crime scores struggle to find admitted markets for assault and battery or liquor liability.

What this means for businesses: Industries that fall into “tougher” categories should treat E&S as part of a long-term risk strategy rather than a short-term fix. Work with carriers that specialize in the business’s industry and understand the operations. Specialized E&S underwriters can tailor coverage and pricing to specific risks, which can pay off in stability over time.

4. Market changes and new players

The strong growth of the E&S market has attracted a wave of new participants, particularly managing general underwriters (MGUs) and programs backed by private investors. Because the E&S market doesn’t require carriers to file rates and forms with each state, it’s far easier for entrepreneurs, underwriting teams and investment groups to stand up new MGU programs quickly, compared to the admitted market. While this brings competition and, at times, lower pricing, not every new player is built to last. Some new entrants write aggressively priced business to gain premium volume fast, then exit the market once losses catch up, leaving insureds and brokers scrambling for replacement capacity.

What this means for businesses: Stability matters. Brokers should vet carrier partners based on their financial backing, reinsurance relationships and underwriting experience. A slightly higher premium from a long-established E&S carrier is often worth more than a short-term discount from one that may not be there at the next renewal.

5. Rising expectations for submission quality

Underwriters rely on detailed submissions and clear communication to evaluate complex risks. They expect transparent information: loss histories, safety programs, claims controls and other documentation that shows a business understands its exposures. This allows underwriters to align coverage and pricing more closely with the actual risk.

What this means for businesses: Treat your submission like a business proposal. Provide complete, accurate data about operations, losses and controls — not just what’s required on the form. As more risks move into the E&S market, clarity and completeness help underwriters understand your business quickly and accurately, which can lead to better-aligned terms.

Finding the Right Fit

There’s no such thing as a simple E&S placement. Every account has its nuances — a combination of exposures, locations, contracts and coverage requirements that make each risk unique. That’s why the E&S market exists: to fill gaps and solve problems when the standard market can’t. Whether it’s managing catastrophe-exposed property, addressing complex liability or structuring higher excess limits, E&S carriers can provide the adaptability businesses may need to stay protected in 2026.