D&O rates nearing bottom
The D&O market remained competitive in the first quarter of 2025. Median total program rates for public companies fell 11.0%, while rates for private companies fell 2.4%, according to Lockton data. (See Figure 20.)
Public companies
The D&O market for public companies remains competitive. Buyers are generally able to maintain or slightly improve upon already aggressive renewal results. In some cases, carriers are pushing back as pricing approaches lows last seen a decade ago.
Capacity is slowly exiting the market, primarily due to low prices and some insurers’ poor experience writing excess layers. Those insurers that remain are slightly less eager to compete for new and existing business, but there is more than enough capital to keep conditions highly favorable to buyers. Underwriters are being particularly aggressive in competing for companies with less than $500 million in market capitalization, which they have identified as being more profitable relative to their exposure.
Tariffs are a significant area of focus for underwriters, as they can lead to significant financial and operational uncertainty and lead to shareholder lawsuits. While insureds can explain to insurers how they expect tariffs will affect their business, the administration’s stance on tariffs is fluid, and underwriters are wary. Financially distressed businesses are also receiving more scrutiny given the current interest rate environment, which can make refinancing a challenge.
D&O insurers are taking a more cautious approach to six-year tail coverage. Rather than preapproving extended reporting periods, many carriers are looking to evaluate the need for tail coverage at the time of a triggering event. Entity investigation coverage is available in some cases, depending on the buyer’s industry, and always at an additional premium. With insurers mindful that the market may be nearing a pricing floor, carriers are also increasingly reluctant to offer guaranteed renewal endorsements.
While the Trump administration’s more hands-off approach to regulation is in many ways a boon to companies, the administration’s aggressive stance against diversity, equity, and inclusion initiatives and environmental, social, and governance frameworks poses challenges for businesses.
Food and beverage companies, meanwhile, are watching for new regulations from the Food and Drug Administration and Department of Agriculture. Life sciences companies are also digesting President Trump’s recent executive order on most-favored-nation prescription drug pricing, which aims to align U.S. drug costs with the lower prices paid by other developed nations.
Securities litigation remains a challenge for public companies. Through June 23, plaintiffs had filed 107 securities class-action lawsuits in federal and state courts, according to Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse. (See Figure 21.) This puts 2025 on pace for 224 filings for the full year, slightly more than the 222 suits filed in 2024.
In March, Delaware enacted Senate Bill 21, which is expected to make the environment for shareholder litigation in the state friendlier to businesses. The bill is intended to help ensure that companies continue to incorporate in Delaware and stay in the state rather than migrating to other states that have touted their own business-friendly legal environments, including Nevada and Texas. Multiple lawsuits, however, have challenged SB21’s constitutionality.
For more on key boardroom risks companies are facing under the Trump administration, watch the first episode of Lockton's Leading on Risk video series.
Private companies/nonprofit organizations
The market for private companies and nonprofit organizations is stable, but with some momentum toward a firming market. Following two years of soft market reductions, it seems renewals are at or near their floor. Insurers are beginning to communicate this to renewing buyers and, in some cases, are focusing more on broadening contracts rather than undercutting premiums and retentions. For most buyers, pricing now is flat.
Capacity remains fairly abundant, especially in the excess market. Two carriers with limited market share have exited from portions of the market, while other insurers have rolled out measures to take corrective actions on underperforming portions of their books. These actions are in response to multiple renewal cycles with rate reductions, and historic levels of claims activity characterized by increasing defense costs. Insurers are also wary of the increasingly complex geopolitical environment and the lack of movement on interest rates in recent months.
Carriers are still eager to compete for new business but are not nearly as aggressive as they were 18 months ago. Insurers remain interested in renewals, but receiving sufficient rate is important; incumbents that must make significant changes to terms have become less eager to compete on pricing.
The Trump administration’s regulatory regime is expected to broadly be more favorable to businesses, but the immediate impact of new tariffs — and uncertainty regarding them — has been a topic of discussion between insurers and policyholders. Insurers are concerned about how companies will comply with tariffs and manage potential changes in cash flow, along with their potential liability under the False Claims Act. Underwriters are beginning to ask questions about the impact of tariffs on supply chains and overall profitability.
Given the potential for high-severity claims, carriers are carefully deploying limits for entity antitrust and entity investigation coverage. Tougher classes of business include healthcare organizations, education institutions, and financially distressed companies. Insurers continue to apply greater scrutiny to companies with upcoming debt maturities, and the rise in corporate bankruptcies and out-of-court restructurings has some insurers bracing for an uptick in side A claims.
Predictable fiduciary liability results continue
The fiduciary liability market is stable, with most buyers renewing flat to slightly down. In the first quarter, median total program rates were unchanged, continuing a pattern seen for several quarters, according to Lockton data. (See Figure 22.)
Insurers generally view fiduciary liability as a profitable supplement to the public D&O line. Insurers in the private/nonprofit segment are more focused on getting rate in other management liability lines where loss frequency and severity is higher.
As the D&O market continues to soften, insurers are trying to diversify their capacity across other lines of coverage. Carriers are aggressively competing for both existing and new business and are offering broad terms and conditions, but it can sometimes be difficult for underwriters to win on renewals due to the typically low pricing for this line.
Underwriters are keeping a close eye on policyholders’ excessive fee controls, which are the leading cause of fiduciary liability losses. Some carriers are more closely scrutinizing plans with $250 million or more in assets.
The plaintiffs’ bar continues to focus on excessive fee suits, often “whale hunting” larger plans and pursuing creative theories. For example, plaintiffs are increasingly maintaining that employer contributions in participant 401(k) plans that are forfeited when participants leave their employers should only be used to pay plan administration fees. In litigation, these plaintiffs are challenging companies that appear to take a different approach.
Notably, settlement values for excessive fee suits are falling. Companies are looking to quickly resolve these matters rather than let unpredictable courts decide on them.
Companies with employee stock ownership plans (ESOPs) also continue to attract scrutiny from underwriters. ESOP claims can trigger both D&O and fiduciary liability policies, so carriers are focused on the financial health of both ESOPs and the companies that employ them.
In April, the Supreme Court reinstated Cunningham v. Cornell University, a class-action lawsuit filed by Cornell University employees who accused plan fiduciaries of paying excessive record-keeping fees. The case has been remanded to a lower court for further proceedings, allowing workers another chance to challenge the university. We are monitoring carriers’ reactions to this ruling, as there is concern that it could cause claims to spike.
For more on how businesses can mitigate the risks of excessive fee litigation, read Litigation trend puts health plan fiduciaries on notice.
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.
