Insurance Marketplace Realities 2026 Spring Update – Fiduciary Liability

Key takeaway

Premiums have stabilized, with flat renewals most common and occasional reductions in retentions. Although excessive‑fee claims declined, other class action activity increased, yet insurers absorbed these mixed trends in 2025, making significant premium increases in 2026 unlikely.

Underwriting

• Market stability was maintained in 2025 and is expected to continue through 2026
  • The number of carriers with appetite for fiduciary liability remained steady in 2025.
  • In some cases, D&O insurers are now looking to get on the fiduciary towers as well (historically, fiduciary insurers have been actively seeking to get on D&O towers).
  • For commercial and large nonprofit risks, underwriters apply heightened scrutiny to defined contribution plans over $250 million, with some avoiding plans above $1 billion. While even smaller plans can raise concerns, most carriers are easing retentions for these risks.
  • Insurers routinely request detailed information on fees, performance, share classes, vendor selection and Preferred features include regular benchmarking, limited revenue sharing, minimal retail share classes, fewer actively managed funds and limited M&A activity.
  • Excessive cost class actions have renewed scrutiny of health and welfare plans. While concern had eased after dismissals and fewer filings, a recent motion to dismiss denial may revive attention.
  • Other areas of recent increased carrier inquiry include outdated mortality tables, plan forfeiture policies, tobacco surcharges and pension risk transfers.
  • Brokers are having some success in getting credit for positive risk factors, including level of delegation, quality of advisors and favorable venues.
  • Some carriers have created specific coverage (often by endorsement) for pooled employer plans, while others have not yet done so.
• Retentions: Insurers remain more focused on retentions than premiums. Seven‑figure retentions are still common for certain exposures and, at higher asset levels, may apply to all class actions, though some improvement has emerged and a few carriers now offer limited retention buy‑downs.
• Coverage breadth: Aside from higher retentions, carriers generally have not restricted coverage. Several are increasingly willing to offer coverage‑enhancing endorsements, though terms vary significantly by carrier.
• Capacity management: Most carriers are closely monitoring the capacity they are putting out, and $5 million primary limits continue to be more common than $10 million.
• Rate prediction qualification: Pricing continues to depend largely on existing rates. Flat renewals remain common, with price per million varying widely by risk classification.

Challenged classes

• Financial institutions: Plans using proprietary funds face additional scrutiny, typically addressed through higher retentions. Overall, however, premiums for financial institutions have stabilized, with some decreases.
• Healthcare entities: In 2025, healthcare entities were not targeted disproportionately by class action plaintiffs, as they had been for prior years, leading to mostly flat renewals.
• Risks to watch: Excessive fee class actions, imprudent fund selection class actions (particularly relating to target date funds), claims challenging use of funds from plan forfeitures, tobacco surcharge, class actions challenging ESG investments (or the lack of them), DOL investigations and cyber audits, actuarial equivalence (outdate mortality table) cases, potential claims arising from benefit cutbacks, claims alleging imprudent DB plan buyouts (pension risk transfers).

Download the full fiduciary liability report to the right.