Management Liability in 2026: What Employers Need to Know About the Evolving D&O and EPL Landscape
The global management liability landscape continues to evolve quickly. Directors and Officers (D&O) insurance, Employment Practices Liability (EPL), and related management liability covers now sit at the centre of organisational risk planning. As we look ahead to 2026, several clear trends are emerging across the industry.
Despite a generally stable market, underlying risks are growing. For organizations such as international companies, understanding these emerging pressures is essential for building a sustainable and defensible risk-management approach.
A favourable market, but underlying pressure is increasing
The current environment remains broadly competitive. Capacity is available and terms remain more flexible than in prior hard-market cycles. For many organisations, this represents a window of opportunity to review limits, retentions and policy structure before underwriting conditions tighten.
However, beneath the surface, several macro pressures are building. Insurers are reporting increases in both the frequency and severity of claims, as well as more complex litigation trends. Regulatory oversight, public scrutiny, and evolving expectations of corporate governance are all contributing to a more challenging risk environment.
This stability should not be mistaken for reduced exposure. Instead, it offers organisations the chance to secure strong terms before market conditions shift.
Employment-related claims continue to rise
Employment Practices Liability (EPL) claims remain a major source of exposure. A combination of changing workplace culture, hybrid and remote work environments, greater employee awareness of rights, and evolving labour laws has led to more disputes being escalated.
Key drivers include:
- Wrongful termination and constructive dismissal
- Discrimination and harassment
- Retaliation and whistleblower actions
- Wage and hour or misclassification disputes
Many organisations, especially schools and non-profits, are finding that even with strong HR processes, employment-related complaints are more likely to result in formal claims than in previous years.
Non-employment governance risks are increasing just as quickly
EPL is not the only area of concern. Non-employment governance failures are becoming one of the strongest predictors of D&O losses. These include:
- Health and safety failures
- Negligent oversight by senior leadership or the Board
- Failure to follow internal policies or safeguarding procedures
- Regulatory breaches
- Data and privacy incidents
- Financial mismanagement or breach of duty
- ESG-related scrutiny
For schools in particular, issues involving safeguarding, child-protection protocols, or failure to supervise are increasingly being treated as classic D&O wrongful acts rather than EPL matters. These incidents can be severe, both financially and reputationally, and require careful structuring of policy limits and retentions.
Health and safety risks now rank as the top global concern
Recent global surveys of directors and officers show a clear shift in perceived exposure. Physical health and safety is now the number-one concern for senior leaders worldwide, followed closely by workplace mental-health and wellbeing.
At the same time, civil litigation, regulatory investigation, and class-action exposure have moved back into the top tier of risks for the first time in several years.
The trend is similar across education, non-profits and multinationals: insurers report that claims arising from compliance failures, procedural gaps, or inadequate oversight are becoming more common than traditional financial-mismanagement allegations.
Coverage is expanding, but underwriting scrutiny is tightening
Management liability programmes today often include a much wider suite of protections than in the past, often bundling:
- Directors and Officers Liability
- EPL
- Fiduciary Liability
- Crime or fidelity cover
- Cyber-related extensions
- Investigation and pre-investigation costs
- Regulatory crisis response coverage
However, insurers are also applying stricter scrutiny. Organisations with complex risk profiles, weak governance, or previous losses may face tighter terms, higher deductibles, or restricted sub-limits.
Conversely, organisations that can demonstrate strong governance, robust procedures, updated safeguarding frameworks, and clear risk-management processes are securing favourable terms and pricing.
The need for proactive planning has never been clearer
Across the industry, there is a consistent message: relying on last-minute renewals or viewing insurance as a simple annual procurement exercise is no longer sufficient.
A forward-looking approach should now include:
- Early renewal planning and limit benchmarking
- Reviewing sub-limits for key exposures such as safeguarding, health and safety, cyber and regulatory investigations
- Assessing the adequacy of retentions and deductibles
- Running scenario analysis to stress-test potential claims
- Aligning governance and HR processes with policy conditions
- Ensuring safeguarding frameworks are well documented and regularly updated
The goal is to prevent gaps, ensure the policy works as intended during a crisis, and secure broader protection while the market remains cooperative.
What this means for international schools/non-profits
International schools and non-profits operate in some of the most complex risk environments. The trends above have direct implications:
- Safeguarding, child-protection failures and negligent oversight are among the most significant D&O exposures for international schools
- Employment-related disputes continue to rise in frequency
- Regulatory oversight and expectations of transparency have increased significantly
- Staff wellbeing, mental health and workplace safety are key governance responsibilities
- Reputational risks can escalate quickly and often drive claims severity
A modern management-liability programme must reflect these realities rather than rely on outdated structures.
Actions to take before your next renewal
To stay ahead of 2026’s evolving risk landscape, organisations should:
1. Review policy structure with a focus on limits and sub-limits
Check whether your D&O limit appropriately covers key exposures such as safeguarding and regulatory investigations.
2. Assess whether your EPL deductible reflects the likely size of your claims
For schools, many EPL matters settle below US$20,000 (a common deductible), meaning a high rdeductible (also known as retention) may be counterproductive.
3. Strengthen governance and safeguarding frameworks
Documented procedures, training, and oversight play a significant role in underwriting.
4. Begin renewal planning early
A six-month runway allows for benchmarking, restructuring and negotiation while the market remains favourable.
5. Treat insurance as part of overall risk governance, not a standalone purchase
The strongest D&O programmes are integrated with HR, safeguarding, compliance and strategic planning.
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