2026 MARKET TRENDS

Executive Liability

Key Takeaways

The executive liability insurance market remains competitive, offering abundant capacity and competitive pricing, enabling organizations to secure broad and cost-effective coverage for leadership teams
Macroeconomic pressures, including inflation, supply shortages and international conflicts, are straining company balance sheets and increasing bankruptcy risks, while rapid AI implementation introduces new underwriting concerns for corporate liability
Increased mergers and acquisitions among small and middle-market companies influence market dynamics
Securities Class Action filings have returned to standard levels after a period of decline

The Executive Liability insurance market continues to offer a favorable environment for organizations seeking business protection.

Overview

The Executive Liability insurance market continues to offer a favorable environment for organizations seeking business protection. With continued softened conditions, the market consists of abundant capacity and aggressive competition among carriers. This landscape allows organizations to secure broad, cost-effective protection for leadership teams, including Directors and Officers (D&O) Liability, Employment Practices Liability (EPL), Fiduciary Liability and Crime/Fidelity coverage.

Market Conditions

Overall market conditions remain favorable for buyers. Ample capacity and a broad risk appetite from most carriers define the current landscape. Carriers are focused on retaining renewals they view as having an above-average risk profile, which further benefits customers. While conditions are advantageous, the market is observing a deceleration of rate decreases, especially on primary layers.

Macroeconomic factors such as inflation, supply shortages, international conflicts and higher raw material costs continue to strain the balance sheets of small to midsized companies. This financial pressure has led to an increase in bankruptcies over the past few years.

In contrast, the current administration’s focus on a lighter regulatory approach, particularly in the financial institution and crypto spaces, has resulted in fewer enforcement actions against public companies.

However, carriers are signaling that ongoing premium decreases are unsustainable for profitability. We are already seeing carriers in certain industries, such as healthcare and financial institutions, beginning to counter further premium reductions and overall risk appetite.

With no material catastrophic activity, the industry remains well-capitalized despite rising loss costs. We expect these market conditions to continue in 2026.

Rate Outlook

Impacts & Considerations

For private companies, employment practices claims continue to be a primary exposure, which can impact the renewal outcome for this line of coverage. Other impacts include broader economic concerns that may affect company earnings, which tend to increase loss frequency. Social inflation concerns also continue to put pressure on rising defense costs for both carriers and insureds. While capacity is available and coverage remains broad, we understand that the overall cost of protection is still the most important factor for customers when developing an insurance program.

The emergence of AI presents opportunities for increased productivity, but it also comes with uncertainty regarding potential errors, privacy and misrepresentation. Carriers are closely watching this new exposure to understand its effect on corporate executive liability. Likewise, the SEC’s proposed regulatory changes for publicly traded companies, such as new disclosure requirements, could have a significant impact on D&O underwriters and insureds.

To adapt to these trends and help improve your renewal outcome, organizations can take several proactive steps:

Engage early

Start the renewal process at least 90 to 120 days before your renewal date, working with a risk consultant to understand market conditions, discuss challenges and best position your company for the upcoming renewal.

Provide detailed information

Supply as much information as possible about your company to help carriers gain a clear understanding of your operations and risk management guidelines.

Strengthen corporate governance

Maintain up-to-date and active corporate governance processes to present a stronger risk profile to underwriters, including staying vigilant on your organization’s cybersecurity defenses.

Plan for M&A

In merger and acquisition situations, involve an executive risk broker early in the process to assist in reviewing indemnification clauses and pre-negotiating run-off coverage.

Leverage carrier resources and relationships

Take advantage of complementary executive liability platforms that carriers offer to help you manage potential exposures, while focusing on building strong relationships with both existing and new carriers.

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Brown & Brown, Inc. and all its affiliates, do not provide legal, regulatory, tax guidance and/or advice. If legal advice, counsel or representation is needed, the services of a legal professional should be sought. The information in this document is intended to provide a general overview of the topics and services contained herein. Brown & Brown, Inc. and all its affiliates make no representation or warranty as to the accuracy or completeness of the document and undertakes no obligation to update or revise the document based upon new information or future changes.