Insurance Marketplace Realities 2026 Spring Update – Managed Care E&O, D&O and Cyber

Key takeaway

The managed care errors and omissions (E&O) and directors and officers liability (D&O) markets remain relatively stable, with carriers generally maintaining flat to modest rate increases. However, entities with limited access to primary markets, including third-party administrators (TPAs) and pharmacy benefit managers (PBMs), continue to encounter elevated pricing and tighter coverage conditions.

From a market perspective, systemic risks — including the MultiPlan antitrust litigation, emerging and unexpected litigation trends, nuclear bodily injury claims, behavioral health claims, use of artificial intelligence and ongoing regulatory scrutiny — remain top of mind for insurers. These dynamics continue to reinforce a cautious underwriting posture, driving the sustained use of coverage restrictions across many organizations.

Additional pressures are stemming from broader macroeconomic conditions, shifting federal and state healthcare policies and longer-term considerations such as climate change, ESG factors, inflation and political uncertainty. While organizations that present strong underwriting profiles may achieve more competitive pricing outcomes, coverage terms and conditions remain largely consistent across the market.

Overall, the public company D&O market is trending toward flat renewals, with modest increases in some cases. For companies presenting heightened risk — such as those with recent claims activity, M&A transactions, or significant market cap growth — insurers are seeking premium increases. By contrast, the private company D&O market remains competitive.

Cyber liability market trends

Premium stabilization continues, which has led to slight premium increases to follow clients’ revenues and exposures.

Improvements in cybersecurity practices among policyholders have contributed to reducing vulnerabilities that could lead to losses, thus bolstering insurer results. Underwriting decisions are heavily influenced by the security controls a company has in place in conjunction with pricing and attachment points.  Underwriters are closely evaluating vendor risks and are also asking proactive questions surrounding use of artificial intelligence.

Competition is strong among markets, certain risks may receive multiple quotes and incumbents are eager to retain business. Increased limit factors (ILFs) have come down in excess placements due to intense competition, especially on large towers, where there have been significant premium decreases.  Capacity is plentiful in the market, partially thanks to new facilities able to provide significant excess capacity with flexibility to be deployed anywhere on a program above the primary layer.

Managed care E&O coverage restrictions and market dynamics

Significant risks continue to drive coverage limitations across the marketplace.

• Retention and coinsurance adjustments: Some carriers continue to increase retentions, apply coinsurance, and sub-limit coverage — particularly around antitrust and regulatory exposures. Regulatory retentions are under close watch due to ongoing political and legislative uncertainty at both federal and state levels.
• Narrowed claim language and exclusions: Related claim language has narrowed considerably, with manuscript exclusions increasingly applied to prior industry claims.
• Exclusions: Association and cyber exclusions remain common and MultiPlan out-of-network exclusions are emerging, while PBM policies are seeing added exclusions for rebates, opioids and other emerging risks.
• Challenging risk profiles: Coverage remains difficult to secure for PBMs, TPAs, entities involved in value-based contracting from the provider side, revenue cycle management, medical services management and other hybrid risks — especially those with bodily injury exposure. Limited market capacity and restrictive terms persist.
• Carrier requirements and coverage structure issues: Some insurers require participation in managed care E&O to offer D&O/management liability policies. This can lead to anti-stacking concerns and complications with rate and capacity in larger insurance towers.
• Strategic risk transfer planning: Risk transfer programs must be carefully coordinated across all coverage lines to minimize gaps and avoid restrictive terms.
• Artificial intelligence: Carriers are seeking clarity on organizations’ use of AI, with a specific focus on utilization review and coverage denial practices.
• Reinsurance impact: Reinsurance continues to influence both coverage availability and capacity in this space.
• Alternative risk financing: Use of captives and other alternative solutions has slowed as market conditions improve. Fronted programs are emerging as a viable alternative to traditional captive structures.
• Carrier landscape: No new domestic managed care E&O capacity has entered the market with no carriers exiting. Offshore carrier activity remains unchanged.
• Noncore business diversification: Expansion into noncore areas is contributing to increased risk and coverage limitations.

Download the full managed care report to the right.