What we have seen in June renewals
June renewals remain soft, particularly for clean private and mid-market listed risks. However, Directors’ and Officers’ (D&O) is closer to its floor than many other classes. The market continues to favour buyers, driven by insurer competition rather than any reduction in risk. This presents a window of opportunity for clients to strengthen coverage before economic conditions prompt tighter underwriting and pricing. Pricing and availability of D&O insurance is expected to face volatility in the near term.
Whilst buyer-friendly conditions are creating opportunities to enhance coverage and increase limits, geopolitical uncertainty and accelerating regulatory change mean that liability for D&Os in both public and private companies continues to rise. As conditions evolve, D&O may well be the first line to feel the shift toward a hardening market. Expectations around compliance are intensifying, with boards facing greater personal accountability from stakeholders, while regulators are applying deeper scrutiny. These pressures are expected to persist well beyond 2026, highlighting the need for boards to ensure there is good governance and robust D&O insurance coverage in place.
Premium pricing trends
Pricing is -10% to -30% for strong risks, with flat to +10% for distressed, disclosure-sensitive, construction, healthcare, technology or private-credit-exposed risks. Whilst premium reductions have remained commonplace, the pace of reductions is slowing, with many insurers pushing back at renewal time and subtly tightening their underwriting strategies amid margin pressure and portfolio consolidation. Businesses in the construction, healthcare and technology sectors have in fact experienced higher D&O rates as a result of elevated claims activity and increased insolvencies.
Insurer behaviour
Insurers are still chasing premium, but underwriting is becoming more thoughtful around Side C, disclosure controls, capital raising, cyber governance and insolvency. In 2026, insurers continue to have heightened focus on the governance and financial health of organisations given increased regulation, rising litigation and scrutiny from the Australian Competition and Consumer Commission (ACCC) and Australian Securities and Investments Commission (ASIC), particularly in the areas of cyber, privacy, class actions and greenwashing. ESG is now regarded as a strategic priority by insurers, with high regard given to climate vulnerability, corporate governance and supply chain practices, as these practices ultimately affect a company’s ability to maintain long-term profitability and remain solvent.
Claims trends
Claims trends include shareholder actions, insolvency, regulatory investigations, private credit, AI disclosure, cyber oversight, governance failures and employment-related director exposure. The D&O landscape is changing quickly, evident in the resurgence of Securities Class Actions (SCA), continued Shareholder Derivative Action (SDA) claims, and growing liabilities linked to fraud and governance. This reinforces the need for D&O coverage that prioritises breadth of protection over price alone.
Given the current economic climate, Australia has continued to move into an aggressive enforcement era for directors, with Director Penalty Notices (DPNs) now one of the Australian Taxation Office’s most aggressively deployed debt-recovery mechanisms. If a company fails to pay specific liabilities, the ATO may issue a DPN making directors, current and former, personally liable for the outstanding amounts, disclose business tax debts to credit reporting bureaus or issue garnishee notices. It is expected that tens of thousands of DPNs will be issued on an annual basis going forward, with no evidence of this slowing. Given that company debts are often large, any personal liability for company debts often bankrupts directors. An increase in the number of insolvencies across SMEs is also expected, with ATO debt recovery practices combined with rising operating costs, interest rates and increased wages despite ongoing labour shortages likely to force many businesses to close or restructure, leading to increased insolvent trading claims, breach of duty allegations and liquidator actions. Financial stress continues to impact SMEs and mid-market businesses.
ESG has moved from reputational liability to financial and legal liability risk for directors and officers. Those who fail to properly disclose risks, maintain robust data and align disclosures with strategy will trigger regulatory action, with insurers now directly pricing governance and disclosure quality into D&O policies. It is expected that sustainability reporting standards will further exacerbate climate change litigation and subsequent D&O losses for non-compliant companies, with an increase in claims seeking damages for non-disclosure and/or misleading sustainability and deceptive conduct in reporting or marketing sustainability.
Cyber-related attacks have continued to rise in 2026, driven by increased digitisation and AI-powered cybercrime, heightening risks for D&Os across sectors including healthcare, education, construction, logistics, transport and critical infrastructure. Organisations holding large volumes of customer data and operating with complex ecosystems and legacy systems face particularly elevated security risks and regulatory obligations. The volume of cyber threats affecting the hospitality industry has also grown, with common threats ranging from phishing attacks, ransomware attacks, data breaches and unauthorised access to booking systems, as further outlined in our recent article. Cyber insurance is experiencing global growth as organisations increasingly look to strengthen their financial safeguards against business interruption, data compromise and ransomware attacks. There are abundant capacity and competition in the market; however, despite this expansion, the absence of robust historical loss data makes underwriting challenging, while costly claims and shifting loss ratios continue to test its long-term viability.
Insurers remain watchful of litigation trends, geopolitical and financial market volatility, cybersecurity and AI risks. Brambles has prompted a reassessment of how limits of indemnity should be calibrated for ASX-listed companies, and it is increasingly apparent that the question is not whether insurance exists, but whether it is sufficient in light of modern class action dynamics.
Legal and regulatory developments
Brambles and Nuix must be presented together. Brambles is the warning about delayed correction of disclosure; Nuix is the counterweight against hindsight. Budget changes affecting property values, project pipelines and investor sentiment increase the importance of disclosure discipline for listed and micro-cap clients.
Class actions landscape
Shareholder Class Actions in Australia fell significantly between 2021 and 2024 as funders struggled to transform liability findings into recoverable compensation as a result of stricter continuous disclosure laws and litigation funding reforms. In 2026, however, SCA filings are showing a clear upward trend, particularly in respect of governance and compliance issues, with ASIC becoming increasingly aggressive on matters such as misleading disclosure, governance failings and continuous disclosure breaches.
In the first successful SCA case of Southernwood v Brambles Limited (No 3) [2026] FCA 418, shareholders were successful in their action against the company, demonstrating both the potency of continuous disclosure claims and the scale of D&O exposure tied to market expectations. Brambles reinforces that continuous disclosure is a dynamic obligation requiring vigilance and speed, and highlights that the financial consequences of failing to meet that standard can be substantial, both in terms of damages and the cost of defence.
In contrast, the Federal Court’s decision in Australian Securities and Investments Commission v Nuix Limited [2026] FCA 490 was handed down on 23 April 2026. The case failed in its entirety, with the court finding that Nuix did not mislead the market or breach its continuous disclosure obligations, while also finding that none of the directors breached their duties. Positively for directors, it suggests that the courts remain anchored in principle as opposed to hindsight when it comes to disclosure. Similar reasoning followed in the June 2026 decision of the Supreme Court of NSW in Rex where the Court drew a clear distinction between the threshold required to find directors liable in contrast with a contravention by the company.
The High Court’s forthcoming decision in Zonia Holdings Pty Ltd v Commonwealth Bank of Australia Limited [2025] FCAFC 63 is expected to set the trend for securities class actions in Australia. The case concerns alleged breaches of continuous disclosure obligations and misleading or deceptive conduct against CBA in respect of an alleged failure to keep shareholders properly informed regarding its non-compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). While the finding was that CBA had breached continuous disclosure obligations, the court ultimately dismissed the appeal. On 13 February 2026, the High Court granted special leave to appeal, meaning the key issue of proof of causation and loss in SCAs will now be considered and determined by the High Court. Given the increased regulatory scrutiny and upcoming developments in the data privacy and climate change landscape, there will be an enhanced focus on greenwashing and climate-related disclosures, and boards must now increasingly turn their minds to exposures such as litigation and large-scale D&O losses related to misleading or deceptive conduct or breaches of directors’ duties.
Sustainability disclosures
With the Australian Sustainability Reporting Standards (ASRS) now in effect, reporting entities must prepare a sustainability report for each financial year including climate statements and directors’ declarations. Entities must have their report audited and obtain the requisite auditor’s report. These requirements were released in conjunction with the Australian Accounting Standards Board’s AASB S1 and S2 (September 2024), which sets out the general requirements for disclosures. Regulatory Guide 280 provides guidance for entities that are required to prepare and lodge sustainability reports. ASIC and the ACCC are actively pursuing enforcement and issuing civil penalties regarding misleading or incomplete climate and ESG disclosures, most notably against superannuation trustees and investment companies. Greenwashing remains a core underwriting focus area, with the court outcomes in Mercer and Vanguard setting important precedents. The Senate inquiry into greenwashing report is due in June 2026 and may signal forthcoming legislative reform, likely to heighten public scrutiny and encourage the use of private litigation to challenge environmental and sustainability claims. There is still limited appetite in the market for carbon-intensive businesses, with better rates available to those with low-carbon operations in the green infrastructure space. Over the past six months, several markets have launched new products to serve emerging sectors such as biodiesel and green hydrogen and to provide insurance covering the risks associated with renewable energy projects.
One of ASIC’s 2025 enforcement priorities was to pursue AFSL holders failing to have adequate cyber security protections following the RI Advice Case. This extends to oversight by AFSL holders of the cyber security controls maintained by their CARs. The outcome of ASIC’s action against FIIG Securities resulted in orders to pay a $2.5M penalty, $500,000 towards ASIC’s legal costs and implement a compliance programme, including the appointment of an independent expert to review and strengthen its cybersecurity and cyber-resilience systems, following findings that it failed to comply with its AFS licence obligations to maintain adequate cyber security measures. As detailed here, in 2023, a cyber-attack on FIIG resulted in the theft of around 385 gigabytes of client information, including driver’s licence and passport details, bank account information, Medicare cards, and tax file numbers.
ASIC has reinforced this in their recently released 2026 Key Issues Outlook, noting cyber-attacks, data breaches and inadequate operational resilience and crisis management as key concerns for this year.
AI and technology impact
AI creates D&O exposure through governance, disclosure, use of automated decision-making, cyber resilience and board oversight of technology adoption. Insurers are increasingly using AI to simplify and automate manual underwriting processes and modernise complex historical systems. AI advancements have brought notable challenges for directors who face mounting pressure to ensure compliance, navigate ethical risks and manage potential corporate liability. Globally, regulators are rapidly enacting strict AI frameworks to govern the development and deployment of AI systems. The implications for D&Os include regulatory non-compliance, financial, legal and reputational harm, algorithmic bias, data privacy violations and emerging litigation risks.
Organisations need to prepare their workforces for AI by building the capabilities of existing employees, bringing in new talent and redesigning structures and roles to support human-AI collaboration. To effectively manage the risks linked to AI, D&Os should take proactive steps that encompass compliance, governance and ethical oversight. Companies that can demonstrate robust governance practices, a positive history of regulatory compliance and responsible AI frameworks will be more attractive to insurers and are more likely to obtain favourable underwriting terms and lower premiums.
What policyholders should do now
Review Side C limits, Side A difference-in-conditions, investigation cover, insolvency wording, disclosure controls and cyber/management liability interfaces. Do not buy the cheapest tower without regard to claims performance.
To reduce the risk of receiving Director Penalty Notices, directors need to maintain a strong understanding of their company’s financial position and reporting systems, ensure all liabilities are accurately reported on time and meet lodgement deadlines. Proactively engaging with the ATO at an early stage to manage and negotiate payment of outstanding tax obligations is also critical.
Organisations must ensure that sustainability is embedded in their corporate strategy and business models. Businesses that can demonstrate reliable and auditable disclosures, strong risk oversight, ethics, transparency and board diversity will be rewarded with better pricing and broader coverage. In the near future, conduct exclusions and pollution or environmental exclusions may evolve within policies.
Boards must prioritise cyber-resilience and invest in people, systems and governance which are fit-for-purpose, commensurate with entity size and the sensitivity of client information held. It is imperative that boards treat cyber resilience as a business-critical capability, not merely a technical function. Risk qualification remains critical and where minimum-security standards are not met, capacity is limited.
Boards should continue strengthening their expertise and awareness by pursuing appropriate education and support, to ensure they are well prepared for another pivotal year for directors and officers in Australia. For further guidance on navigating emerging D&O exposures, get in touch with your Bellrock Advisor.
Continue reading our full range of market updates:
- Insurance Market Overview: July 2026
- Claims
- Workplace Risk
- Corporate and Multinational Risk
- Construction, Property and Development
- Financial Lines
