Executive risk
The market for executive risk lines is stable, but shifting in some respects. Construction and design buyers generally can expect stable capacity and retentions. But directors and officers liability (D&O) pricing has reached the bottom, according to Lockton data, and insurers are evaluating potential rate increases. (See Figure 4.)
Many D&O insurers are showing caution amid global economic uncertainty and continually shifting regulations. These factors have led to a dynamic loss environment, which is putting pressure on managing overall loss portfolios. For example, 749 companies declared bankruptcy through Dec. 14, 2025, which is 8% more than declared bankruptcy in all of 2024, according to S&P Global Market Intelligence. This highlights that managing overall financial performance is essential.
Construction and design firms should prioritize:
- Project profitability.
- Mitigating financial disruptions due to supply chain/logistics challenges or increased tariffs or taxes.
- Overall governance of project execution and avoiding contract disputes.
Sound financials are also essential to perpetuating stable company valuations, especially for companies with employee stock ownership programs. D&O and fiduciary underwriting are closely tied together; for best results, buyers should remain focused on approaching the marketplace with robust submission materials, leaning into carrier relationships, and partnering with brokers to establish ample renewal timelines.
The Department of Labor has signaled a more favorable regulatory environment in 2026, committing to less “regulation through litigation.” However, fiduciary liability buyers should remain cautious and maintain a heightened awareness of retirement and health and welfare plan governance.
Employment practices liability rates are expected to shift in 2026. Two years of soft market conditions coupled with increased losses have driven insurers to an inflection point. While insurers have kept a close eye on capacity deployment and retention levels, EPL pricing has not kept pace with the claims environment. Social inflation remains a key threat; jurisdictions across the country — especially California — tend to favor plaintiffs, whose expectations have risen. Defense costs for companies targeted in litigation are rising at a quick pace.
For construction and design firms, EPL claims are the most frequent type of executive risk claim. In addition to allegations of discrimination, harassment, retaliation, and wrongful termination, wage and hour claims are extremely prevalent. Employment litigation can be costly, and buyers are looking for insurance solutions for both routine issues and emerging risks. Staying ahead of the renewal timeline will help to avoid surprises in EPL renewals in 2026.
For commercial crime buyers, employee theft is still commonplace. The increase in bankruptcies and corresponding job losses and cutbacks has insurers concerned about a potential uptick in claims activity. Social engineering fraud loss remains front of mind as threat actors continue to use sophisticated attacks bolstered by AI use. Appropriate risk management controls are critical. For the construction and design industry, where high-valued transactions for large projects are frequent, limits should be aligned with average ACH and wire transaction values.
