The 2026 private and nonprofit management liability market is relatively stable - capacity is available and competition continues without sharp dislocations across directors’ and officers’ liability, employment practices liability (EPL), fiduciary liability, crime, and kidnap & ransom coverage for most buyers.

However, some insurers are experiencing pressure as inflation, rising defense costs, increased claim frequency and higher claim valuations challenge profitability. Private and nonprofit organizations should consider taking some strategic steps as they plan for their next renewal.

State of the Private Management Liability Market

Across most private and nonprofit financial lines, pricing is broadly stable, except for EPL where insurers are incurring losses as employment related claims become more frequent and more expensive to defend. Outside counsel rates are at historic highs, with partners at some firms now charging upwards of $2,000 per hour. Even with rate caps in place, the overall cost of defense is rising, which is resulting in an increasingly rapid pace of limit erosion.

At the same time:

• Inflation is eroding the value of the insurance dollar; coverage extensions and sublimits under policies have increased over time; and, the complexity and cost of defending matters is increasing.

The result is a challenging situation for insurers. The value of the dollar is down, while losses, including claims, defense, and settlements, are moving up. Insurers in this space continue to face challenges achieving rate adequacy, driving upward pressure on renewal pricing.

Insurers are responding behind the scenes by implementing exposure-based strategies related to geography, industry and size of risk. While things seem stable on the buy side, underwriting is becoming more stringent, with closer scrutiny of financials, governance, employment practices, and internal controls. Many insurers are reviewing portfolios and preparing for potential adjustments.

Considerations for Private and Nonprofit Buyers

In this “quiet but strained” environment, taking a more deliberate approach to program design and insurer selection would benefit private companies during their coverage renewals.

Benchmark – then go deeper

Review how your limits and retentions compare to peers, but don’t stop there. Consider whether your structure still reflects today’s realities - higher defense costs, evolving EPL and crime risk, and your current balance sheet and risk appetite.

Battle test the market when it matters

You do not need to fully re-market every renewal if you have confidence in your current program and carriers. However, a sophisticated renewal approach should always:

• Test alternative options;
• Confirm that pricing is commensurate with risk; and,
• Validate that terms and conditions remain competitive.

“The goal is not just the lowest premium, but the best combination of coverage, price, and long term partnership.” – Candice Catalano

Prioritize well capitalized, long term partners

Given the current uncertainty, insurer quality matters. Buyers should look for carriers that:

• Are financially strong and well-capitalized;
• Have a consistent track record in private and nonprofit financial lines; and,
• Are not simply opportunistically “buying the business.”

Securing long-term relationships and strong terms from a reputable carrier can be a real advantage if market conditions tighten.

The Role of an Insurance Panel and Curated Wording

Program quality is not only about limits and price, it is also about policy wording. Off the shelf policies often leave potential coverage gaps that impact at the time of the claim. Curated panel solutions can address many of these issues through extensive, pre negotiated coverage enhancements. In some cases, this can mean numerous targeted amendments that curate definitions, limit exclusions, provide flexible defense provisions, and other crucial mechanics.

For many private and nonprofit buyers, especially in the middle market, it is difficult to re-create that level of refinement on a one off basis. The Aon panel effectively “bakes in” lessons learned from prior claims and negotiations, so that unseen problems are corrected before they become costly surprises and, at the same time, partner your organization with strong carriers.

Strategic Outlook for 2026

As 2026 unfolds, the private and nonprofit management liability market is likely to remain outwardly stable, competitive and offer strong available capacity. However, the combination of inflation, rising defense costs, and increasing EPL pressures suggests an underlying fragile equilibrium.

Private companies can prepare by:

• Taking a fresh look at limits, retentions, and structure;
• Testing the market at key inflection points;
• Prioritizing strong, long term insurer partners; and,
• Leveraging panel wordings to address hidden coverage issues.

Thoughtful action in a quiet market can help buyers lock in advantages before any shifting in market conditions.

If you have any questions or are interested in obtaining coverage, please contact your Aon broker.