Management Liability Market Update: Q3 2025
The Management Liability (ML) Insurance market continues to favour clients. In most cases, premiums are either reducing or holding stable – a product of the ample capacity available for most risks. But with several insurers pointing to the arrival of the bottom of the market cycle, premiums could be set to edge upwards in the medium term.
In the meantime, insurers are focused on retaining clients by differentiating their offering. This includes broadening coverage, such as through “any one claim” limits, increasing sub-limits, removing or reducing the scope of additional restrictions, and offering Long Term Agreements.
Others are innovating, with the launch of new products: a new BHSI enhancement offers clients in some sectors a reduced retention for selecting their Panel defence counsel; Chubb have launched a new product tailored for Investment Portfolio companies, offering co-defendant coverage for the investment backer; and Beazley are willing to consider an entity EPL sub-limit under an insured’s D&O policy, regardless of their size.
As new employment laws come into effect, D&O insurers are looking to increase their premium intake by expanding into affiliated insurance products – including Crime and standalone Employment Practices Liability. Standalone D&O run-off may also be available for clients looking to ringfence the liability of past directors (such as in spin-outs), or where acceptable pre-agreed terms are not available from incumbent insurers.
Key trends
- Geopolitical tension brings greater risk – The D&O landscape is being reshaped by global trade disruptions, protectionist policies, and regulatory uncertainty. These are driving increased costs and financial volatility, heightening the risk of claims relating to disclosure failures, mismanagement, and regulatory breaches.
- Cyber threats bring D&O risk – Amid recent high-profile cyber incidents in the UK, boards face growing scrutiny for cybersecurity governance failures. Aligning cyber and D&O coverage is key to mitigating risk.
- More frequent Side A claims – According to some primary insurers, around half of non-US claims are Side A losses (insured person costs that have not been indemnified by their employer). The main drivers were insolvencies, financial fraud, and ESG-related claims. Many clients are using recent premium savings to increase their Side A DIC limit. Lockton’s APEX product is one potential solution.
- Restructuring and workforce changes – As financial pressures prompt job cuts and leadership reshuffles, EPL claims and whistleblower actions are expected to rise. In parallel, recent and forthcoming employment legislation is set to expand employer responsibilities, increasing the potential for claims.
- Expanding director accountability – Directors are increasingly responsible for ESG, ethical sourcing, data governance, and workforce changes, with technology and AI oversight set to dominate board decisions. D&O insurers anticipate rising claims tied to alleged breaches of fiduciary duties, disclosure oversights, and emerging risks such as AI-washing.
- Inflation and legal costs inflation – We expect ongoing inflation and complex litigation to continue driving up defence costs.
In depth: New legislation triggers workforce risks
The Worker Protection Act 2024 focusses on the prevention of sexual harassment in the workplace, and the Employment Rights Bill (to become law in 2026) is working through parliament and will include proposals such as:
- Zero-hour contracts: End zero-hour contracts and introduce guaranteed hours for some workers.
- Fire and rehire: Restrict employers’ use of “fire and rehire” practices.
- Sexual harassment: Require employers to take steps to prevent sexual harassment.
- Prevent the use of Non-Disclosure Agreements: To prevent workers speaking out about allegations of harassment or discrimination.
- Parental and bereavement leave: Establish leave rights from the start of employment.
- Flexible working: Require employers to allow flexible working where practical.
- Notice of shift changes: Require employers to give reasonable notice of shift changes, and pay compensation for shifts cancelled at short notice.
All of these regulatory changes have the potential to lead to more frequent employment practices claims against directors if they fail to keep up with changes in legislation.
Further reading: Protecting the workforce: preparing for the new duty on employers to prevent sexual harassment
Cyber events driving D&O scrutiny
Recent high-profile UK cyber incidents have intensified board-level focus on cyber risk management. These events have prompted many insureds to reassess their exposure – to cyber-attacks, but also to D&O claims:
- Boards are increasingly held accountable for cybersecurity governance failures, with regulators scrutinising their oversight responsibilities.
- D&O insurance may respond to shareholder litigation, regulatory investigations and civil fines stemming from cyber-related mismanagement.
- Missteps can trigger D&O claims – such as poor preparation, ineffective response, unanticipated supply chain disruption, or failure to secure appropriate cyber coverage.
Companies are advised to align cyber and D&O policies to avoid coverage gaps and ensure resilience in the face of increasingly sophisticated attacks.
- Find more detail here: How D&O insurance can help protect against cyber related liability
- To learn more about our solutions visit our Management Liability page.
Jo Newman, Senior Vice President, Lockton
Ian Nichol ACII, Senior Vice President, Lockton
Disclaimer
The views and opinions expressed in this guest blog are those of the author and do not necessarily reflect the official policy or position of PIMFA. The author and their firm are clearly identified and responsible for the content provided.