Stability reigns for executive risks
Conditions across executive risk lines are largely stable, with some pockets of rate flattening or firming. In the third quarter, median total program rates:
FELL
for public company D&O. (See Figure 15.)
FELL
for private company and nonprofit D&O.
REMAINED
FLAT
for employment practices liability (EPL).
REMAINED
FLAT
for fidelity/crime.
REMAINED
FLAT
for fiduciary liability.
Flattening public D&O market the new norm
Most public companies are renewing their D&O programs flat, with rate reductions becoming more difficult to secure. Excess carriers are pushing back where they feel pricing sits below necessary minimums and pricing is not sustainable. Insurers are generally less willing to concede further on rate.
Capacity is still replaceable, but often only by tapping newer market entrants with limited claims-paying histories. This is a trade-off that many buyers are weighing more carefully.
Overall capacity remains ample. Established primary carriers participating only in excess positions are willing to drop down if, for example, incumbent primary carriers push for rate. However, these carriers rarely offer materially better terms than expiring programs. New entrants continue to offer competitive primary terms to position themselves for excess layers, but their participation introduces more variability in claims handling and long-tail reliability. Buyers and their boards are watching both of these factors closely.
After years of sustained rate reductions, primarily resulting from insurers conceding to competition to maintain business, the market is now showing firmer resolve. Rising severity — particularly from derivative settlements, event-driven claims, and escalating legal fees — is reaching higher into towers, prompting established markets to resist further rate compression.
Many insurers are now prepared to pass on business that does not align with their pricing models. Meanwhile, an improving capital markets environment is giving insurers access to “true” new business — including initial and secondary public offerings and de-SPAC transactions — which eases the pressure to retain accounts at unsustainable pricing.
For new business, competition remains strongest on primary and low excess layers. Middle excess layers are proving more challenging, as carriers feel premiums are inadequate for the tail risk they are assuming.
Although broad coverage is still readily available, some D&O carriers object to the breadth of certain policies available in the marketplace and decline to follow suit. Underwriters are particularly focused on AI governance, tariff impacts, macroeconomic volatility, and the quality of financial disclosures. They are scrutinizing how management teams communicate earnings guidance risk, what boards are doing to address emerging exposures, and whether companies’ data governance and operational resilience align with their disclosures.
Companies with worsening claim experience, stressed balance sheets, or digital asset treasury strategies are facing more difficult conditions amid insurer concerns about bankruptcies and defaults. For the year ending June 30, 2025, 32 “mega” bankruptcies were filed, involving companies with $1 billion or more in reported assets, according to Cornerstone Research, up from 24 for the year ending June 30, 2024. In the first six months of 2025, 17 mega bankruptcies were filed, the most since the first half of 2020.
Through November, plaintiffs had filed 175 securities class-action lawsuits in federal and state courts, according to data from Stanford Securities Litigation Analytics. (See Figure 16.) This puts 2025 on pace for 191 filings for the full year. An annual average of 211 suits were filings for 2021 through 2024, according to the Stanford Law School Securities Class Action Clearinghouse. Nevertheless, insurers continue to point to a rise in defense costs as an area of concern.
Through November, at least two Fortune 500 companies have been targeted in class-action litigation alleging that management had misrepresented the impacts of tariffs on the companies' finances and operations. These are believed to be the first — but likely not the last — class actions linked to the second Trump administration’s tariff policy.
In September, the SEC reversed its long-standing practice of refusing to accelerate the effectiveness of registration statements for companies whose corporate charters or bylaws include mandatory arbitration provisions intended to limit class-action litigation. This opens the door for prospective IPOs to rely on arbitration clauses and could encourage more public listings, including on the Texas Stock Exchange, which has secured SEC approval to launch in 2026 as a competitor to the New York Stock Exchange and Nasdaq.
Separately, President Trump has publicly advocated for the elimination of quarterly earnings reports. The SEC is currently evaluating whether to move U.S. public companies to semiannual reporting, consistent with practices in the U.K. and several other global markets.
Private D&O market remains stable, for now
The private company and nonprofit D&O market remains competitive, though signs of a turning point are beginning to emerge. Continued claims activity is impacting insurer profitability, and most insurance buyers are no longer seeing rate reductions. Despite this, capacity remains robust, with several established carriers and newer entrants actively seeking to expand market share, allowing most buyers to build towers of up to $50 million in limits.
No new insurers have entered the market over the last six months, and although Everest has exited the retail market, AIG — which acquired Everest’s retail book — has committed to maintaining its capacity. This competitive balance is limiting the ability of insurers to push for rate, increase retentions, or materially tighten terms. The exception is buyers with expanding exposures, large losses, or sector-specific issues. At present, there is no momentum toward a firming market.
The market for healthcare organizations remains a bit more challenging, and carriers continue to scrutinize asset managers, especially larger buyout-focused private equity firms with $10 billion or more in assets under management. Underwriters are also watching antitrust- and opioid-related exposures and applying greater scrutiny to risks in the education and gaming sectors.
Financial health remains a central underwriting concern. Insurers want to see credible liquidity management and proactive board engagement, often requesting early refinancing discussions (12 to 18 months before maturity). In addition, carriers are seeking to reprice accounts with meaningful loss activity, in some cases pushing for premiums that are double expiring levels.
The claims environment for private D&O has been relatively stable overall, with no notable frequency increases in any specific areas. The recent government shutdown has had a limited impact on D&O outcomes thus far, though organizations heavily reliant on government funding could face more difficulty in the months ahead.
Looking forward, many anticipate a more favorable M&A environment in 2026. Some companies are preparing for add-on acquisitions or potential exits from public markets, although several states are increasingly challenging deals in some sectors, including healthcare.
EPL market firming, held off by competition
Competition continues to temper upward pricing pressure in the EPL marketplace. Most buyers are renewing flat, with carriers seeking single-digit rate increases where loss activity or exposure growth warrants it. For buyers purchasing EPL as part of a broader management liability package, rate increases in EPL may be partially offset by reductions in other lines.
Insurers remain eager to write EPL alongside D&O, fidelity/crime, and fiduciary liability, but they are not willing to undercut incumbent retentions. This is especially true in a claims environment characterized by rising settlement values and higher defense costs. Discrimination, harassment, and wrongful termination remain the primary drivers of severity.
Newer exposures continue to emerge. Claims tied to AI-influenced hiring decisions — now regulated in several jurisdictions — and layoffs associated with reductions in force are increasing. Employers are also fielding more scrutiny of their use of biometric screening tools, an area for which state and local laws are evolving quickly.
The Trump administration has actively pushed back on diversity, equity, and inclusion (DEI) initiatives that employers have championed in recent years. These actions have not yet produced meaningful claims activity, but that could soon change. In October, the Equal Employment Opportunity Commission (EEOC) regained a quorum for the first time since January, and the agency is expected to issue formal guidance on and begin adjudicating what constitutes “illegal DEI.” Other stated priorities for the EEOC include reverse discrimination protections and combating anti-American and religious discrimination.
Wage transparency claims have also become a major concern. Fourteen states and the District of Columbia now have pay transparency laws in effect, according to human resources data services company Brightmine. (See Figure 17.) These include Massachusetts, where a new law became effective on Oct. 29, and Washington, where a recent state court ruling could lead to more litigation and EPL insurance claims. Delaware has enacted a pay transparency law that will take effect in September 2027.
Similar laws have been proposed but not enacted in Iowa, Maine, Michigan, and Wisconsin. Several cities — including New York, Cincinnati, and Cleveland — have enacted their own laws, as have New York’s Albany and Westchester counties. Insurers are managing this exposure through defense-only endorsements, exclusions, and sublimits.
The EPL market remains more challenging for retail, hospitality, healthcare, and technology employers, as well as those with a significant number of high-wage earners or class-action exposure. Employers domiciled in California or with an employee presence in the state are also seeing less favorable terms and higher retentions. Most insurers are not willing to offer wage and hour coverage in California at all.
Stable conditions persist in fidelity/crime market
Conditions in the fidelity/crime insurance marketplace remain fairly consistent with recent quarters. Despite newer market entrants, rates remain stable, with buyers generally renewing flat or with small increases or decreases. Conditions are more favorable for excess coverage as more carriers compete in the space.
Overall capacity is ample but can be limited on the primary layer for buyers looking for higher social engineering fraud (SEF) limits. Still, a handful of carriers have entered the excess SEF space and are willing to go top-heavy over primary sublimits, provided that policyholders complete SEF questionnaires.
Where buyers are seeing rate increases, it is often driven by the need for rate in other lines, especially for buyers purchasing package management liability policies. Recent paid losses and significant exposure changes are also resulting in less favorable renewal outcomes for individual buyers.
Inigo’s crime excess policy form and the reemergence of all-risks policy in the London market are adding capacity to the marketplace. As a whole, however, carriers remain cautious about writing coverage for buyers with inadequate controls, particularly in the context of SEF, poor loss experience, and/or significant international exposures. Coverage for digital assets and property extensions under SEF can be more difficult to obtain.
Employees and businesses are uncertain about the labor market and overall economy, which could lead to an uptick in employee theft risk. Carriers, nevertheless, are beginning to offer stand-alone SEF solutions for policyholders that do not wish to purchase full excess crime coverage.
Fiduciary liability market remains stable
Conditions for buyers are generally steady in the fiduciary liability market. Public companies are renewing flat to slightly down; private companies are mostly renewing flat, with slight increases and decreases for some individual buyers. Growth in plan assets can also drive minimal rate increases at renewal.
Capacity is ample, with carriers eager to compete and grow their market share, especially for private company business, except where employee stock ownership programs (ESOPs) are involved. Most carriers are content to maintain expiring terms to prevent marketing.
Buyers with plan assets of $500 million or less are likely to see flat pricing due to low premium costs. Programs that have not been marketed recently might benefit from a more favorable rate environment through competition. Buyers — especially those with $1 billion or less in assets — can also achieve improvements in retentions.
ESOPs continue to draw heavy underwriting scrutiny, with fewer markets willing to entertain fiduciary coverage for them. Underwriters tend to shy away from plans until they have been in existence for three to four years.
Excessive fee litigation, a risk that now extends beyond 401(k) plans to include health and welfare plans, remains a significant area of concern for insurers. In April, in Cunningham v. Cornell University, the U.S. Supreme Court reversed a decision by the 2nd U.S. Circuit Court of Appeals and effectively lowered the bar for excessive fee suits and other claims alleging violations of Section 406 of the Employee Retirement Income Security Act of 1974 (ERISA), which governs prohibited transactions.
At least one post-Cunningham ruling favoring plaintiffs has already been issued, and more are expected, keeping insurers on edge. Underwriters are routinely requiring supplemental questionnaires, more detailed disclosures, and higher retentions, specifically for excess fee exposures.
Insurers are also scrutinizing the adoption of alternative investment options following President Trump’s executive order allowing ERISA-regulated plans and participants to invest in private equity, real estate, and digital assets. In addition, carriers are monitoring a new wave of plan forfeiture claims challenging IRS rules governing the treatment of unvested employer contributions.
Meanwhile, in September, former fiduciary insurance executive Daniel Aronowitz was confirmed by the Senate to lead the U.S. Department of Labor's Employee Benefits Security Administration. He is widely expected to bring a more business-friendly approach to the agency’s enforcement and regulatory priorities.
Recommendations
- Consider prioritizing relationships with established carriers that have proven claims-handling capabilities and long-standing reputations, rather than chasing short-term premium savings. Also work closely with experienced brokers to secure the broadest available terms and maintain productive long-term relationships with insurers.
- Proactively communicate financial and organizational changes. Alert brokers to shifts in ownership structure, liquidity challenges, covenant pressures, upcoming debt maturities, furloughs, or other developments that could meaningfully expand risk. (For D&O programs, these dynamics may necessitate additional Side A difference-in-conditions limits, prepaid tails, or other targeted coverage enhancements.)
- Reinforce risk controls/governance practices in underwriting submissions and discussions. Robust financial oversight, HR practices, and fiduciary processes reduce the likelihood of loss and help position insureds more favorably, particularly for SEF-related exposures.
- Explore loss prevention and risk management services that are included in many insurance policies.
- Evaluate multiyear options. Where offered, multiyear renewals can help preserve historically low pricing, reduce volatility, and provide additional time for strategic planning.
1Note: Rate ranges presented here reflect expected renewal outcomes — as of the Lockton Market Update publication date — over the next quarter for most insurance buyers. These should not be taken as a guarantee of any specific results during renewal negotiations. Depending on risk profiles, loss histories, account specifics, and other factors, individual buyers may renew their programs outside these ranges.
3Expected ranges are for total programs.
