Insurance Curator As securities litigation, activism and ESG-linked claims evolve, U.S. boards must reassess D&O liability insurance programs now to remain protected in 2026. This article focuses on the U.S. market (with emphasis on New York, Delaware, California and Texas corporate centers), outlines emerging litigation drivers, highlights insurance market dynamics and pricing signals, and gives practical next steps for boards and risk committees.
Executive summary — What boards in the USA need to know
- Securities litigation frequency and severity remain elevated. Shareholder suits (including derivative actions, securities class actions and activist-driven claims) continue to target disclosures, ESG statements, and AI/data governance.
- D&O pricing and attachment strategies are shifting. Public company programs are moving toward larger towers, higher retentions and expanded Side A protections; middle-market companies face higher relative increases.
- Exposure hotspots: New York and Delaware litigation venues, California regulatory scrutiny, and industries with AI/consumer data (Bay Area and nationwide tech hubs) and energy/ESG reporting risks (Houston, Dallas).
- Actionable board steps: strengthen disclosure governance, stress-test D&O towers vs. activist scenarios, insist on Side A / entity reimbursement clarity, and coordinate with corporate counsel and broker partners.
Why 2026 is different: litigation drivers to watch
- ESG and climate-related suits: plaintiffs are increasingly suing over alleged misstatements in climate risk disclosures and net‑zero claims—especially for companies headquartered in California and New York. See evolving trends in Climate‑Related Disclosures and Litigation: Why Directors and Officers (D&O) Liability Insurance Matters.
- Activist campaigns: aggressive proxy fights and disclosure challenges increase the probability of securities suits—particularly for public companies concentrated in Delaware corporate filings and NYSE/Nasdaq listings. See Activist Investors and Increased Litigation: D&O Insurance Strategies to Weather Shareholder Campaigns.
- AI, data and cyber: failures in AI governance or data breaches that trigger stock drops now lead to securities suits alleging inadequate oversight. Boards should consult AI, Data and New‑Age Risks: Preparing Directors and Officers (D&O) Liability Insurance for Emerging Tech Exposures.
- Cross-border litigation: increased foreign filings and parallel actions complicate coverage and allocation across D&O towers and Side A.
D&O market dynamics and pricing signals (U.S. focus)
Insurers continue to be selective. Pricing and structure in 2026 will vary by revenue, sector, litigation history, and governance profile.
- Large public companies: aggregate D&O program costs (primary + excess layers) commonly run from $1 million to $10+ million annually, with highly complex or high-exposure companies (tech, biotech, financial institutions) paying toward the upper end.
- Mid‑cap public companies: typical program costs often range from $300,000 to $2 million annually depending on revenue, jurisdiction (Delaware/NY filings increase underwriting scrutiny), and claims history.
- Private and middle-market companies: primary D&O for privately held firms or smaller public companies frequently ranges $25,000–$400,000 annually.
Table: Illustrative annual D&O program cost ranges (U.S. market)
| Company profile | Typical annual total D&O cost (primary + excess) | Typical primary limit |
|---|---|---|
| Large-cap public (>$5B revenue) | $1M – $10M+ | $5M – $25M |
| Mid-cap public ($500M–$5B) | $300K – $2M | $2M – $10M |
| Small-cap / Middle-market ($50M–$500M) | $75K – $400K | $1M – $5M |
| Private / VC-backed (<$50M) | $25K – $150K | $1M – $3M |
Source note: ranges reflect recent insurer market commentary and broker market intelligence aggregations across U.S. markets (New York, Delaware filings and West Coast exposures typically drive higher pricing).
Key market signals boards should expect:
- Higher retentions for entity-side coverage and increased insurer scrutiny of prior acts and disclosure controls.
- Growth in demand for standalone Side A policies (to protect individual directors when entity indemnification is unavailable).
- More targeted underwriting questions on ESG programs, AI governance and cyber controls.
External market references (for trend verification):
- Cornerstone Research — analysis of securities filings and settlements (historical view of filing volume and settlement sizes): https://www.cornerstone.com/Insights/
- Industry reporting on D&O market trends and rate movements from brokers and insurers (examples include Marsh, Aon and Willis Towers Watson market updates): https://www.marsh.com/us/insights.html and https://www.aon.com/home/index.html
Specific companies, carriers and market examples
U.S. carriers active in D&O include Chubb, AIG, Travelers, CNA and Beazley. While insurers rarely publish standard quotes, broker market commentary and market placements indicate the following illustrative behaviors in 2024–2026 negotiations:
- Chubb and AIG: continue to lead in capacity for towered programs, often providing primary limits of $5M–$25M in combination with excess layers for large-cap clients. Large public companies with strong governance can negotiate multi-million-dollar program costs; weaker governance or active litigation history materially increases premiums.
- Beazley and CNA: more active in middle-market and specialty industry verticals (technology, healthcare), providing competitive primary limits for middle-market accounts.
- Travelers: known for underwriting discipline in financial institutions and energy sectors where regulatory and ESG-related exposures exist.
(For board-level procurement, insist brokers obtain multiple competitive structures across these carriers and secure Side A enhancements where applicable.)
Litigation and settlement context — what insurers are watching
- Plaintiffs’ bar remains active in New York and Delaware—courts in those states set many precedents affecting D&O exposure.
- Settlement sizes and defense costs drive erosion of aggregate limits—boards should evaluate whether their limits and allocation (Side A vs. Side B/C) are adequate to cover prolonged defense in high-profile suits.
- Example observation: high-profile securities settlements can range from several million to hundreds of millions of dollars depending on industry and alleged misstatements; that creates pressure on retention strategy and excess capacity placement.
Practical steps for boards (U.S. corporate focus: NY, DE, CA, TX)
- Review your D&O tower now — confirm aggregate limits, Side A capacity, retentions and allocation among layers.
- Coordinate disclosure controls and legal sign-off for ESG and AI-related public statements to reduce misstatement risk.
- Stress‑test scenarios: activist proxy fight, AI failure class action, climate‑risk misstatement — quantify potential defense spend and settlement ranges against current limits.
- Insist on reporting from broker on carrier appetite and comparative pricing (obtain at least 3 market quotes and one Side A-only option).
- Ensure crisis counsel and pre-approved law firms are in place in Delaware and New York to respond quickly to securities filings.
Comparison: D&O cover features boards should prioritize
| Feature | Why it matters | Board action |
|---|---|---|
| Side A standalone limit | Protects directors when company cannot indemnify | Buy or increase Side A; verify carrier A++ ratings |
| Retention structure (entity vs. individual) | Impacts immediate cashflow and indemnification risk | Negotiate lower entity-side retention; secure indemnification clauses |
| Defense outside the limit (DOL) | Prevents defense erosion of settlement capacity | Seek defense costs outside limits on primary and first excess |
| ESG/AI endorsements | Clarifies coverage for new exposures | Obtain affirmative language or carve-back for exclusions |
| Multi-jurisdictional exposure language | Addresses parallel foreign actions | Confirm allocation and defense cooperation across jurisdictions |
Conclusion
Boards in the USA — particularly those operating out of New York, Delaware, California and Texas — should expect a D&O insurance market in 2026 that demands stronger governance proof, larger and more strategic towers, and proactive risk mitigation for ESG, activism and AI-driven exposures. Start with an urgent review of your D&O program: confirm Side A capacity, retentions, and defense allocation; run scenario stress tests for activist and ESG claims; and direct brokers to secure competitive multi-carrier placements.
Internal resources for deeper planning:
- How ESG Claims Are Reshaping Directors and Officers (D&O) Liability Insurance Demand
- Activist Investors and Increased Litigation: D&O Insurance Strategies to Weather Shareholder Campaigns
- AI, Data and New‑Age Risks: Preparing Directors and Officers (D&O) Liability Insurance for Emerging Tech Exposures
References
- Cornerstone Research — Securities class action and filings insights: https://www.cornerstone.com/Insights/
- Marsh Insights — Insurance market and D&O updates: https://www.marsh.com/us/insights.html
- Aon — D&O/trends and market commentary: https://www.aon.com/home/index.html