From AI to IPOs: Insights and Emerging Issues from the PLUS D&O Think Tank

The PLUS D&O Think Tank identified a set of timely topics that reflect how quickly the directors and officers liability landscape is evolving. A major area of focus is the new administration and how policy, regulatory, and enforcement changes may affect insureds. Even where changes remain uncertain, D&O professionals need to monitor developments involving regulators, geopolitical relationships, the FTC, and other government actors because shifts in public policy can affect corporate operations, disclosures, governance decisions, and coverage considerations.

AI: Reshaping the D&O Landscape for Insurers and Insureds

Artificial intelligence remains another priority topic. The discussion centers on how AI is being used both by insurers in underwriting and by insureds in their own businesses. This matters because AI introduces new governance, disclosure, and risk management questions, and D&O professionals need to understand how these tools may create or reshape exposures.

Derivative Litigation and Corporate Governance

The Think Tank also highlighted developments in Delaware, Texas, and Nevada, particularly around derivative litigation and changes in the legal environment for corporate governance. These issues raise important questions about how traditional D&O policies will respond and how underwriters and brokers should evaluate evolving exposures. As companies consider different jurisdictions and governance structures, insurers and advisors must assess whether existing underwriting and policy approaches still fit the risk.

Rethinking Strategies as the IPO Market Becomes More Active

The reemergence of IPOs was identified as another significant trend. As the IPO market becomes more active, carriers and brokers are reconsidering underwriting strategy, pricing, breadth of coverage, and severity potential. For D&O professionals, IPO activity signals heightened securities exposure and the need to carefully evaluate how public-company risks are entering the market.

Stress and Challenges Amid Insolvency Litigation

Microeconomic pressures and insolvency risk are also top of mind, especially in the private company space. Financial stress, liquidity challenges, and potential bankruptcies can lead to claims against directors and officers, making it important to understand how D&O policies may respond when companies face distress or insolvency-related litigation.

Settlement Severity Trending Upwards

The Think Tank also noted concern over increasing settlement sizes, particularly the growth in settlements above $20 million. This trend matters because larger settlements can affect pricing, reserving, claims strategy, and underwriting appetite. Understanding what is driving severity is critical for insurers, brokers, and claims professionals evaluating the long-term impact on the D&O market.

New Trends in Higher Education Exposures

Higher education exposures for nonprofit and private D&O policies were another suggested topic. Areas such as name, image, and likeness (NIL), wage and hour issues, antisemitism-related lawsuits, and third-party discrimination claims are creating new and complex risks for educational institutions. This matters because higher education boards and leadership face growing scrutiny, and D&O professionals need to understand how these sector-specific exposures may affect governance liability and insurability.

New Wave of SPAC Activity and Strategy for the Future

SPACs were also identified as a returning area of interest. The Think Tank suggested looking both at the new wave of SPAC activity and at lessons learned from earlier claims and litigation. This is especially relevant for underwriters and claims professionals who want to assess whether SPAC-related risks were properly underwritten, how those unique policies performed, and what changes may be needed going forward.

Potential Changes in Securities Reporting and Arbitration

Additional ideas focused on securities reporting and shareholder rights. One topic involves the possibility of moving from quarterly SEC reporting to semiannual reporting, raising questions about disclosure burden, shareholder protection, and fraud investigations. Another involves arbitration of investor claims under federal securities laws, including whether companies would prefer many individual arbitrations over a single securities class action and how that could affect retentions and related claims analysis. These topics matter because they go directly to disclosure practice, litigation strategy, and how D&O coverage may respond in changing securities environments.

Immigration-Related Exposures for Boards

Finally, immigration-related D&O issues were raised as a niche but potentially important topic, especially for companies that rely heavily on foreign workers. Board-level decisions about workforce strategy and compliance under changing immigration policies could create governance and liability concerns that are relevant to D&O insurers and advisors.

Overall, these topics matter to professional liability insurance professionals because they reflect the forces currently reshaping D&O risk: regulatory change, emerging technology, evolving corporate governance standards, securities litigation trends, financial distress, and industry-specific exposures.

Thank you to the PLUS D&O Think Tank for their continued insights that help shape the content PLUS provides throughout the year.

• Megan Black, AON
• Joe Catalano, AmWINS Insurance Brokers LLC
• Nora Hattauer, Zurich
• Jon Janes, Woodruff Sawyer
• Elan Kandel, Bailey Cavalieri
• Justin Kudler, ARC Excess & Surplus, LLC
• Albert Peterson, Travelers
• Hayley Reid, Chubb
• Ali Tehranchi, CNA Insurance
• Jennifer Weinstein, Skyward Insurance
• Amora Wood, RPLU, CPLP, ExecPLP, RT Specialty

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