Soft D&O rates will not pay a creditor who sues you personally

Soft premium is not a quiet year

The price of private and nonprofit D&O, for a clean account, is still a buyer’s market. CRC Group’s March 2026 ExecPro market survey put the segment firmly in a soft cycle, with abundant capacity, and said 2026 pricing is generally expected to be flat to down about 5 percent. FounderShield’s January 2026 outlook, citing CRC’s Private D&O REDY Index for the third quarter of 2025, said primary and excess renewals averaged flat to minus 5 percent, and that more than half of 2025 renewals signed flat. Gallagher’s June 2026 insurance market report called private-company D&O one of the most competitive environments in years, with MGA capacity up, retentions generally steady, and some insureds still seeing modest decreases.

Calm pricing is not the same thing as a calm claim file. CRC said claims activity showed a modest uptick even while terms stayed favorable. Gallagher said carriers are watching employment practices, cyber, regulatory inquiries, and insolvency. Aon’s May 2026 private and nonprofit management-liability insight called the market outwardly stable — and a fragile equilibrium underneath — with inflation, rising defense costs, and higher claim valuations pressuring insurer profitability. Outside counsel partners at some firms are now charging upwards of $2,000 an hour. Even with rate caps, that burns a shared limit fast.

Healthcare, education, and other historically tight classes still get more scrutiny. So do companies that look financially stressed on the application. Soft rates are a reason to read the form this month. They are not a reason to assume you do not need the coverage.

The lawsuit that shows up most is still an employment fight

For a private Florida company, the claim that walks in the door is rarely a securities class action. It is more often a former manager, a cook, a tech, or an applicant who says discrimination, harassment, retaliation, or wrongful termination — and who names the people who made the decision.

Chubb’s private-company risk survey put employment-practices claims — harassment, bullying, retaliation, discrimination — as a majority of all management-liability related actions. Gallagher lists employment practices among the exposures private D&O underwriters are monitoring. Aon said employment-related claims are where private management-liability insurers are actually taking losses: more frequent files, more expensive to defend, limits eroding faster. FounderShield warned that wrongful-termination and retaliation suits can spill into D&O when the complaint alleges mismanagement or a failure to run HR the right way.

That is why the package question matters. Many private “management liability” policies put directors and officers coverage and employment practices liability on one shared limit. An EPLI claim can spend the tower before a co-owner or creditor claim arrives. Employment practices liability insurance is built for the workplace lawsuit. D&O is built for the governance lawsuit — breach of duty, misrepresentation to a lender or investor, a minority-owner fight, a creditor claim in distress. They are related. They are not the same. Wage-and-hour overtime and tip-credit fights usually sit outside both, or only pick up a thin defense sublimit on the employment form — the same gap we covered in the September employment-practices piece.

If you only bought “D&O” and assumed it covered every employee lawsuit, or only bought a small EPLI endorsement and assumed the owner was protected on a partnership dispute, read the declarations page before the lawsuit does.

If the company cannot indemnify you, Side A is the personal-asset question

A general liability policy defends the entity for a slip-and-fall. D&O is often the only policy that can defend you when the company is out of money, barred from writing the check, or on the other side of the table.

Bankruptcy courts saw an 11 percent increase in filings last year, and business bankruptcies rose 7.1 percent for the twelve months ending December 31, 2025, according to an Insurance Journal feature in June 2026. CRC tied the significant rise in 2025 bankruptcy filings to harder D&O placements for financially distressed organizations heading into 2026. Gallagher put rising insolvencies on its 2026 risk list and told buyers to consider expanding Side A. FounderShield said financial distress is now the top underwriting indicator carriers will dig into on renewals.

In plain English, the sides of a D&O policy do different jobs. Side A pays individual directors and officers when the company cannot or will not indemnify them. Side B reimburses the company when it does indemnify. Side C is entity coverage for the private company’s own alleged wrongful acts. When a company files, estate fiduciaries regularly sue the people who ran it, and the D&O tower is often one of the few unencumbered pots of money left. Courts generally treat dedicated Side A proceeds as belonging to the individuals, not the bankruptcy estate. A January 2026 Texas bankruptcy ruling in the First Brands matter — written up by Hunton Andrews Kurth in the National Law Review — gave former executives immediate access to Side A limits for defense while treating the traditional Side ABC tower as estate property the debtor still had an interest in.

You do not need a mega-bankruptcy to care. A closely held contractor, a restaurant group that restructures, or a practice that cannot advance defense costs under its operating agreement is the Florida version of the same problem. Ask whether Side A is on the form, whether defense costs sit inside or outside the limit, and whether anyone assumed the company checkbook would always be there.

Florida already wrote your manager duties into the LLC Act

You do not need a public boardroom for fiduciary duty. Under section 605.04091 of the Florida Statutes, each manager of a manager-managed limited liability company — and each member of a member-managed company — owes duties of loyalty and care to the company and its members. The duty of care, in the statute’s words, is to refrain from grossly negligent or reckless conduct, willful or intentional misconduct, or a knowing violation of law. Good faith and fair dealing apply too.

Section 605.04093 then limits when a manager or member can be personally liable in damages for a management or policy decision. The shield is real. It is not absolute. Personal liability can still attach when a breach of duty lines up with listed conduct — among other things, a criminal-law violation without reasonable cause to believe the conduct was lawful, a transaction with an improper personal benefit, an unlawful distribution, or, depending on who is suing, conscious disregard, willful misconduct, recklessness, or bad faith.

The same chapter answers the insurance question directly. Section 605.0408 says a Florida LLC may purchase and maintain insurance on behalf of a member or manager against liability asserted against them in that role — even in situations where the operating agreement could not wipe out the liability or promise indemnification. That is the statutory hook for private-company D&O on a Florida LLC. Keeping the operating agreement, the bank accounts, and the indemnity language clean still matters. So does not treating the company checking account like a personal ledger. The statute is why “we’re just an LLC” is not a coverage strategy.

The 401(k) fight is usually a different policy

If you sponsor a 401(k) or another employee benefit plan, the people who pick funds, hire the recordkeeper, or sit on the plan committee are ERISA fiduciaries — often the same owners who think of themselves as “just the LLC managers.” CRC’s 2026 fiduciary market note said overall fiduciary pricing is still soft and competitive, while excessive-fee litigation, breach-of-fiduciary-duty claims, and health-plan fee scrutiny keep rising. New employee stock ownership plans remain a harder class.

A management-liability package that prints the word “fiduciary” on a shared limit next to D&O and EPLI is not the same thing as a real fiduciary limit for the plan. When an excessive-fee suit or a benefits claim arrives, you want to know which tower responds and how much is left after an employment file. Ask for the fiduciary coverage to be called out on its own — limit, retention, and who is an insured — the same way you would not assume general liability covers a wage claim.

What we want you to do this month

• Confirm you actually have private-company D&O — not just general liability, a businessowners policy, and workers’ compensation.
• Ask whether employment practices liability sits on a separate limit or shares one tower with D&O (and fiduciary). Shared limits get spent in order.
• Ask whether Side A coverage for non-indemnifiable loss is on the form, and whether defense costs are inside or outside the limit.
• If you have a 401(k) or other employee benefit plan, ask where fiduciary liability lives and at what limit.
• Pull last year’s financials before renewal. Carriers are underwriting distress harder after 2025’s bankruptcy spike; surprise numbers on the application create surprise terms.
• If you operate as a Florida LLC, put the operating agreement, indemnity language, and D&O certificate in the same folder as the articles — the statute already assumes you may need all three.

We can review the form you already have, or shop a private-company management-liability quote.