August 19, 2026

Reshaping Risk: EPL & D&O Liability Under the Current Administration – Webinar Recap

As the current administration reshapes federal enforcement priorities, EPL and D&O risk are shifting in ways that directly affect underwriting, claims handling, and legal strategy. Here are a few key takeaways from the discussion that break down the key regulatory, litigation, and market trends professionals need to track.

EPL Enforcement and DEI Rollback

Three federal initiatives are driving EPL risk: DOJ Civil Rights Division anti-DEI directives targeting public/private employers and government-funded entities, a White House fraud investigation unit, and a civil rights fraud initiative using the False Claims Act to let private citizens pursue federally funded organizations for DEI-related civil rights violations. Enforcement currently focuses on large public companies, big nonprofits with $5M+ endowments, and universities, with a recent example being a major technology company that settled with the DOJ for $17 million over its DEI programs.

Jurisdictional Hotspots and the EEOC’s New Direction

California, New York, and Illinois drive the highest EPLI frequency and severity, largely due to fee-shifting statutes, reluctance of courts to grant dispositive motions, and a more sophisticated plaintiffs’ bar; internal data cited showed 40% of one firm’s national EPLI caseload comes from California and New York alone, and out-of-state employers operating there pay roughly 9–10% higher average losses. The EEOC’s national enforcement plan will prioritize national-origin discrimination against Americans, reverse discrimination against majority employees, religious accommodation issues, and protections for vulnerable/low-wage workers, while de-emphasizing disparate-impact claims and largely stepping back from sexual orientation/gender identity matters.

AI’s Growing Role in Claims Volume

AI is accelerating claim volume: plaintiffs’ attorneys can now draft demand letters and complaints in about 20 minutes versus two to three hours previously, enabling more filings. An uptick in AI-assisted pro se filings was noted including one plaintiff who filed a motion to dismiss, an answer, and a motion for summary judgment simultaneously, along with a case involving a security guard’s AI-generated false investigation report, cited as grounds for potential new case law addressing employee AI misuse.

D&O Trends: Public vs. Private

On the public D&O side, despite lower SEC enforcement and shifting priorities toward ESG/climate disclosures and DEI, overall exposure has risen due to elevated securities litigation filings, stronger surviving cases, larger event-driven settlements, and more sophisticated derivative suits; energy, industrials, and crypto sectors have benefited from priority shifts, and the Bloom Energy case was attributed more to US-China geopolitical/tariff issues than sector-specific risk. On private D&O, rising bankruptcies/insolvencies and False Claims Act enforcement, a record $6.8 billion in FY2025 recoveries, are key drivers, with core areas including healthcare fraud, government contracting/procurement, tariffs and customs violations, and the Civil Cyber Fraud Initiative; the Civil Rights Fraud Initiative has also targeted universities with large endowments.

Market Response and Claims Handling Strategy

Carriers are becoming more selective on high-risk sectors in public D&O, moving toward year-to-year policy evaluation rather than multi-year terms, while the private/nonprofit market remains highly competitive and split by state and sector experience. Recommended claims-handling strategies include playing offense early establishing the trial narrative within 15–20 days, minimizing case size through jurisdictional defenses and limited motion practice, using tools like offers of judgment (Rule 68/CCP 998) and video depositions, bifurcating punitive damages from the case in chief, hiring the right defense counsel for the jurisdiction, and evaluating bad facts and exposure immediately to enable early resolution while noting policy limit demands, though useful for settlement, are increasingly used by plaintiffs’ counsel to create leverage between insureds and carriers.

Why This Webinar Matters to Professional Liability Professionals

Shifting DEI enforcement, EEOC priorities, and False Claims Act activity under the current administration are reshaping EPL and D&O exposure, while AI is accelerating claims volume. Professional liability professionals need this insight to adjust underwriting, pricing, and claims strategy to these evolving risks.

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