--- title: What Does a Hardening D&O Market Mean for Companies? description: An already hardening Directors & Officers Insurance marketplace is becoming even more problematic for buyers during the COVID-19 pandemic. image: https://blog.axisins.com/hubfs/D%26O%20Market.jpg --- [![AxisInsurance](https://blog.axisins.com/hubfs/files_2023/logo.png)](https://www.axisins.com/) Connect with us Call us Today [(201) 847-9175](tel:2018479175) [(877) 787-5258](tel:8777875258) - - About Axis - [Our Approach](https://www.axisins.com/about-us/) - [Our Team](https://www.axisins.com/our-team/) - [Testimonials](https://www.axisins.com/testimonials/) - [Case Studies](https://www.axisins.com/case-studies/) - [News & Events](https://blog.axisins.com/tag/news-and-events) - [Careers](https://www.axisins.com/job-opportunities/) - Product Lines - [Overview](https://www.axisins.com/products/) - [On-line Quoting](https://www.axisins.com/products/on-line-quoting/) - [Surety Bonds](https://www.axisins.com/products/surety-bonds/) - 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[Subscribe To Our Blog](https://share.hsforms.com/18qZLml0MTSqtYWBFqQFAGA35dv4?__hstc=172306556.605fbd816f522e1de3e9428cb969d5b4.1580877711545.1580973215492.1580978435349.10&__hssc=172306556.3.1580978435349&__hsfp=1035641285) # What Does a Hardening D&O Market Mean for Companies? December 17, 2020 ![](https://blog.axisins.com/hubfs/D%26O%20Market.jpg) Axis ![D&O Market](https://blog.axisins.com/hs-fs/hubfs/D%26O%20Market.jpg?width=1254&name=D%26O%20Market.jpg) It's not uncommon for anyone with their finger on the pulse of the liability insurance market to hear about hardening or softening. But with the [pandemic](https://www.businessinsurance.com/article/20200707/NEWS06/912335484/D%26O-market-hardens-even-more-amid-pandemic) taking over how we live and work, it's no surprise it's also been an agent of change in insurance rates and coverages. COVID-19 alone continues to pose a considerable claim concern for insurers. Still, combined with an ongoing virus threat, a stressed-out economy, civil unrest, and impending bankruptcies, you have the makings for insurance claims on a scale never seen before. An already hardening [Directors & Officers Insurance](https://www.axisins.com/products/management-liability-insurance-do/) marketplace is becoming even more problematic for buyers during the COVID-19 pandemic, with rates continuing to rise, available limits shrinking, retentions growing, and insolvency exclusions added. In response to this, risk managers are changing their D&O programs' structure and considering putting their risks into captives. ## What is a Hard D&O Market? For more context, it's essential to look at what makes a market hardening. This occurs when there is increased demand for coverage, coupled with limited supply. Business competition has shrunk, policy premiums are higher year-over-year, and even those companies with little change in risk profile have a hard time getting coverage. In a hardening market, insurers might not only raise premiums; they may also force clients to employ more risk in higher self-insured retentions. Insurers will apply stricter underwriting standards and potentially walk away from new business opportunities and renewals if the client is unwilling to agree to their terms. A hardening market suggests that the market has started to develop tightened conditions but is not yet in a hard state. Today, premiums and retentions have moved upwards, but some insurer competition levels remain intact, holding off more severe increases. ###  Where the Market Stands Now The market began turning late in 2018, well before the onset of the virus. Many factors led to fast-rising rates and hardening, such as the #MeToo movement and a rise in securities class-action lawsuits. But the pandemic accelerated the trend earlier this year as claimants filed dozens of D&O-related COVID claims since March.  Insurers are being more selective in implementing their capacity as rates are [increasing](https://www.businessinsurance.com/article/20200811/STORY/912336053/D%26O-insurance-premiums-rise-100). This has created the hardest market in decades, with specific sectors experiencing the most stress, including retail, energy, hospitality, entertainment, and airlines. Limits are also finding themselves in the middle of cuts, with insurers who previously offered $20 million in capacity reducing their amount to $10 million. Insurers are beginning to hone in on the most impacted industries by the ongoing pandemic, including those that rely on foot traffic (I.E., retail, dining, entertainment).  ### How Can Businesses Mitigate the Impact of a Hardening Market? With a hardening market continuing to settle in for the time being, there are steps that companies and their employees can take to cut down on potential oncoming adverse conditions. - **Begin Early:** Engage with insurance providers early in the renewal process. You should develop renewal pricing expectations with your broker but prepare for those expectations to change over time. - **Model Risk:** Whether your unique risk rises for some reason, be sure that your insurance provider is employing data to alleviate the market impact. Your broker should model your company's risk to highlight financial metrics and other factors that emphasize a weakened vulnerability to risk and potential loss severity. - **Bolster Coverage Range: **Seek coverage improvements to lessen the risk of unnecessary coverage limits if you are the subject of a COVID claim. An insurance broker should provide seasoned coverage and professionals who audit policies and negotiate the best language to understand. Although the market continued to harden, coverage breadth continues to grow. #### About Axis Insurance At [Axis Insurance Services](https://www.axisins.com/), we aim to help our customers identify their exposures and protect themselves. Founded in 1999, we offer insurance programs to a wide variety of professionals and industries including attorneys, real estate, healthcare, architects, and more, and also have a wholesale division. We pride ourselves on offering flexible insurance coverage tailored specifically to each customer’s needs. To learn more about our solutions, contact us at (877) 787-5258 to speak with one of our professionals. 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