RPS Says the US Healthcare Liability Market 'Isn't Broken but It's Starting to Bend': Hospital Capacity Falls to $5 Million Lines, Some Pricing Doubles and Abuse Cover Is Disappearing

Risk Placement Services, RPS, a US wholesale insurance broker, has published its 2026 US Healthcare Market Outlook Report, and the trade publication Risk & Insurance summarised it on June 17, 2026. The findings below come from that summary. The RPS report itself was not reviewed. The Risk & Insurance page also carried a sponsored piece from another company; that content is produced separately, its figures are attributed to other sources, and this article does not use it. The summary does not address retentions, which are the amounts insureds pay before insurance responds, or nuclear verdicts, so this article does not either.

The overall picture

RPS describes a market under structural stress: capacity is contracting, placements take longer and pricing is sharply higher. Demand for cover keeps growing, but capacity, especially in the upper layers of insurance towers, keeps shrinking. A tower is a layered program in which several insurers each provide a slice of cover above the one below. RPS says the market has not broken, a phrase echoed in the title of its outlook, which describes a market that is bending and not breaking. Hospital programs that once closed in days now take weeks, and some placement pricing has doubled year over year.

Smaller lines and higher prices

The report says the era in which one carrier provided $20 million on a hospital program is over. The common maximum is now $5 million. A calculation made here shows that a $50 million tower at $5 million per carrier needs at least 10 carriers, which matches the report's statement that such a tower may need 10 or more. On price, Margaret Jacobs of RPS is quoted as saying pricing has risen from about $10,000 per $1 million of coverage to $20,000 or more in some states. At those rates, a million dollars of cover costing $20,000 means a 2% rate on line, a ratio of premium to limit calculated here.

Hospitals and abuse coverage

Markets no longer routinely include abuse limits in hospital liability policies. Insureds respond by building what the report calls split towers: they buy as much abuse limit as is available and complete the rest of the program without it. James McNitt of RPS says he does not expect this to turn around anytime soon. For a hospital, a split tower means that part of its liability protection excludes abuse claims, and so the organisation carries that risk itself or buys a smaller amount.

Physicians

Shared-limit programs, in which all physicians in a group draw on one aggregate limit, are replacing separate-limit programs. This reduces the carrier's exposure but creates gaps for the group, since one large claim can use up the limit for everyone, which increases demand for physician excess coverage. RPS reports rising claim severity in obstetrics, gynecology, neurosurgery and pediatrics, and warns that some admitted carriers and risk retention groups are underpricing that business. It adds that more than 71% of physicians use telemedicine at least weekly, and that the risks it creates are pushing more exposure into the excess and surplus market, where insurers have more freedom on rates and terms.

Human and social services

This segment shows the sharpest cutbacks. Carriers that offered $10 million limits have cut back to $5 million or less, and several program markets have exited. Coverage is shifting from occurrence-based to claims-made. Occurrence cover responds to events that happened during the policy period, whenever the claim is made, while claims-made cover responds only to claims reported during the policy period, and retroactive dates on abuse coverage are advancing. Sublimits on abuse, assault, molestation and self-inflicted injury are increasingly common. RPS warns that these sublimits can make excess coverage effectively worthless after a large claim, since the excess layer may sit above a small sublimit. It also says some nonprofit foster care agencies are uncertain whether they can stay in business.

Residential care

Senior living remains workable for most accounts, according to the summary, though operators that have grown through mergers and acquisitions face closer scrutiny. Behavioral health and human services residential programs are being pushed into the excess and surplus market for the first time.

Submissions and brokers

Submission quality now determines whether accounts get quoted or declined. Carriers weigh broker relationships and track records more heavily; as McNitt put it, carriers are underwriting the broker, not just the risk. For healthcare organisations, that means a complete, well-prepared application and a broker with credibility in the market are part of getting cover.

What to take from it

The report is from a broker with an interest in the market it describes, and its figures are examples given by named RPS staff, not market-wide statistics. It does not give an average price change across the market. Still, the combination of smaller lines, higher prices and dropped abuse cover points to a market where buyers should expect more carriers, higher cost and more negotiation.

Limits

This article relies on a trade-press summary of a broker's report, and its figures are quoted from named individuals. It is general information, not insurance advice.