D&O market remains stable, with insurers watching macro trends
D&O pricing was generally stable in the second quarter. Median rates fell 3.8% for public companies and 0.3% for private companies and nonprofits, according to Lockton data. (See Figure 18.)
Public companies
Although rate reductions were commonplace in 2024 and early 2025, they have become more difficult for public company buyers to secure. Capacity remains abundant, driven by competition among established carriers seeking to write more primary business and newer entrants seeking to gain traction. Underwriters, however, are increasingly prioritizing pricing discipline over growth, and most buyers are now renewing their programs flat or close to flat.
Buyers that are willing to move to newer carriers with limited claims experience or engage multiple insurers during marketing may still secure single-digit rate decreases. Modest rate reductions may also be achievable on primary layers, although several large carriers are stepping back from excess placements where they feel pricing has fallen below sustainable levels.
Broad coverage is still widely available, and many carriers are open to adding coverage enhancements to support retentions and mitigate further rate reductions. Underwriters, however, are shifting their focus toward emerging risks. Carriers, for example, are paying close attention to AI-related exposures, with concerns including potential claims related to bias, model errors, and cybersecurity vulnerabilities. Tariff uncertainty is also top of mind for both insurers and insureds, with insurers applying greater scrutiny to insureds in financial distress, especially those impacted by rising debt costs or changes in consumer sentiment.
Insurers are monitoring and assessing the impact of several regulatory and enforcement developments at the federal level, including:
- The Trump administration’s stated intent to use the False Claims Act (FCA) to address a variety of concerns, including corporate cybersecurity oversight; diversity, equity, and inclusion initiatives that may run afoul of recent executive orders (which the administration has referred to as “illegal DEI”); the provision of gender-affirming care; and tariff noncompliance. FCA claims can lead — and, in some recent instances, have led — to securities litigation. While FCA claims have historically been a focus mainly for healthcare organizations and government contractors, these recent developments warrant attention by all organizations.
- The appointment in August of Margaret "Meg" Ryan as head of enforcement at the Securities and Exchange Commission (SEC). With a background in military law — most recently as a senior judge on the U.S. Court of Appeals for the Armed Forces — Ryan is viewed as a somewhat unconventional choice for the SEC. Insurers will watch with interest as her enforcement agenda takes shape.
- Emerging digital asset regulations, including the recently passed GENIUS Act, which creates a regulatory framework for stablecoins, and two other bills under consideration by the Senate after passage in the House.
- President Trump’s executive order allowing 401(k) and defined contribution plans to make investments in alternative assets — including private equity, real estate, and digital assets — available to participants.
- Efforts by the administration to reduce regulatory requirements for IPOs, which could increase deal flow but may also bring greater litigation risk.
The Trump administration’s deregulation efforts could lead to uncertainty about long-term financial outlooks, and lax regulatory frameworks could prompt companies to push boundaries, inadvertently opening them up to shareholder litigation or enforcement actions. D&O insurers often respond to uncertainty with broader exclusions, higher premiums, and tighter terms and conditions.
Meanwhile, in May, Texas amended its Business Organization Code, strengthening its business judgment rule and reducing litigation risk for companies incorporated in the state. Notably, the amended code prohibits fee awards in litigation where the only outcome is additional or amended disclosures. It also allows companies to include a minimum ownership threshold in governing documents as a condition for bringing derivative actions.
In the first half of 2025, plaintiffs filed 114 securities class-action lawsuits in federal and state courts, according to Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse. (See Figure 19.) In comparison, plaintiffs filed 111 suits in the first half of 2024 and 115 suits in the second half. Despite the relatively stable volume of filings, carriers maintain that loss experience is deteriorating and defense costs are rising, prompting closer scrutiny of retention levels on current programs.
With potentially more challenging market conditions ahead, it’s increasingly important for insureds to maintain strong relationships with long-standing incumbent carriers, especially those with proven claims-handling abilities. Highlighting risk management programs and financial strength during the underwriting process can help buyers differentiate themselves and position themselves to secure more favorable terms.
Private companies/nonprofit organizations
For private companies and nonprofit organizations, the marketplace has been relatively stagnant for the last two quarters, with little change in pricing, coverage, and self-insured retentions for most buyers. It is unclear whether the market has bottomed out or if insurers are simply seeking to hold on to positions as the end of the year approaches. Many insurers are showing caution amid economic uncertainty and concerns regarding tariffs, interest rates, and consumer demand.
Most private and nonprofit insureds are renewing flat; incumbent insurers have reached pricing floors after two years of aggressive competition, while newer entrants are growing more cautious due to concerns about debt loads, cash reserves, and interest rates. Broader terms and conditions are readily available, but insurers are deploying capacity more selectively and with greater discipline, often competing on coverage rather than pricing.
Carriers are increasingly focusing on their financial health and potential solvency risks. As a result, they are more closely scrutinizing insureds in the healthcare, education, and gaming industries and those facing financial distress and antitrust or opioid exposures.
Persistently high interest rates continue to challenge insureds, especially as inflationary pressures and new tariffs raise concerns about potential bankruptcies and restructurings. Few carriers view this as an underwriting opportunity, and many are pulling back from certain risks, leaving insureds with fewer options.
After pausing enforcement of the Foreign Corrupt Practices Act (FCPA) in February, the Department of Justice (DOJ) issued a memorandum on June 9 with new guidance on enforcement of the law. Prosecutors are now being directed to prioritize serious alleged misconduct that harms the competitiveness of U.S. businesses, threatens national security, or involves transnational criminal organizations or cartels.
For corporate leaders and the companies they serve, this highlights the importance of maintaining strong anticorruption measures. Although D&O policies often cover defense costs for enforcement actions brought against individuals, they do not cover monetary fines and penalties that arise from wrongdoing, for which directors and officers may be personally liable.
Meanwhile, wildfire-related litigation involving California personal lines carriers — although not directly related to D&O — may indirectly influence insurers’ risk appetites, policy terms and conditions, and overall participation in California across all lines.
As pricing flattens, insureds should consider stress testing their carriers’ policy language and retention structures and exploring multiyear deals, which may offer cost savings. During renewals, insureds should work with their brokers to proactively explain their financials and risk management strategies to underwriters rather than allowing insurers to make their own assumptions.
Fidelity/crime market stays competitive
Conditions in the fidelity/crime insurance market are favorable for most buyers, backed by growing capacity for commercial risks. In the second quarter, median total program rates were unchanged, according to Lockton data. (See Figure 20.)
Insurers are increasingly competing for better risks and view fidelity/crime coverage as an opportunity to round out specialty insurance portfolios. Compared with more cyclical lines such as D&O and errors and omissions (E&O), crime coverage offers more stable and predictable returns, although it is not immune to the impacts of a down economy.
Most buyers are renewing insurance programs flat, with pricing generally driven by exposure changes, claims history, and risk management controls. Insurers are being protective of their existing books; even accounts with less than ideal profiles are often renewing without significant price movement. Crime is viewed as a favorable add-on to D&O and employment practices liability policies and is often used as a tool to keep overall rates on management liability package policies down.
Underwriters, however, are scrutinizing insureds’ social engineering fraud (SEF) controls, especially when higher limits are requested. While carriers are increasingly open to including loss of property under SEF insuring agreements and view excess SEF opportunities favorably, most remain conservative in how they deploy limits. SEF claims frequency is increasing as threat actors exploit the human element, making use of AI, deepfakes, and other tactics to bypass controls.
Employee theft is still commonplace, and insurers are mindful that rising bankruptcies and potential job cuts or layoffs in an uncertain economy could lead to more theft. But research on this topic is mixed; some studies indicate that employees are less likely to risk dishonest activity when job cuts are possible.
Some insurers are limiting coverage for digital assets and applying increased scrutiny to companies operating in the cryptocurrency space, reflecting concerns over regulatory uncertainty, asset volatility, and exposure to cybercrime. Cannabis businesses, casinos, healthcare entities, and pharmacies are facing less favorable market conditions.
In March, Nacha — previously known as the National Automated Clearinghouse Association — introduced new monitoring requirements for receiving depository financial institutions; these institutions are often the final destination for funds diverted in SEF schemes. Nacha’s new rules place greater responsibility on these institutions to detect and flag suspicious transactions, with the goal of increasing the likelihood that stolen funds can be recovered and returned to victims.
For fidelity/crime insurance buyers, carrier selection is paramount. Policyholders should prioritize insurers with deep expertise in financial crime, strong claim-handling capabilities, and access to loss mitigation services that can be critical during an incident. As SEF schemes grow more sophisticated, having a partner that understands the evolving threat landscape and can respond effectively is critical.
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.
