Insights

Most private business owners believe directors and officers insurance is for public companies, specifically boards with shareholders, SEC filings, and class action exposure. The logic seems reasonable: if you are not publicly traded, who would sue your directors?

The answer, in 2026, is a longer list than most business owners expect: disgruntled employees, minority shareholders, business partners, creditors, vendors, customers, and regulators. None of these claimants require a stock ticker. All of them can pursue the individuals who made the decisions personally when a D&O policy is not in place to defend and indemnify those individuals.

The Exposure Is Not Limited to Public Companies

Directors and officers liability arises from decisions made in the management of a business. Fiduciary duties, disclosure obligations, governance responsibilities, employment decisions, and financial management all fall within the scope of what a director or officer can be held personally accountable for when things go wrong.

Private companies face D&O exposure from several distinct sources. Employees bring wrongful termination, discrimination, and harassment claims that can involve D&O liability where the individual conduct of a decision-maker is at issue. Creditors and bankruptcy trustees pursue D&O claims when a business fails and decisions made by management contributed to the loss. Minority shareholders challenge decisions made by majority owners or controlling managers. Regulatory agencies bring enforcement actions that name individual directors and officers for governance failures or disclosure violations.

According to Allianz Commercial’s 2026 D&O insurance outlook, the frequency of new claims against directors and officers is now approaching or exceeding pre-pandemic rates in most regions, with North America showing the most significant severity pressure. Global corporate bankruptcies are projected to rise 5 percent in 2026, sitting 24 percent above pre-pandemic levels and bankruptcy events are among the most common triggers for D&O claims against private company executives.

What’s Driving the Rise in Private Company D&O Exposure

Several converging trends are expanding D&O exposure for private businesses specifically.

Artificial intelligence and technology governance have introduced new categories of liability. Business owners who have made public claims about AI capabilities in sales materials, investor communications, or regulatory filings face “AI washing” exposure if those claims are challenged as misrepresentations. According to Amwins’ 2026 state of the market analysis, brokers are seeing increased concern around AI washing, where companies overstate their AI capabilities in ways that could trigger misrepresentation claims directly against the individuals responsible for those statements.

Cyber incidents create D&O liability through a separate channel from the cyber insurance claim itself. When a breach occurs and the board is alleged to have failed to implement adequate cybersecurity oversight or business continuity planning, shareholders, customers, and creditors can pursue claims against the directors personally. General liability and cyber insurance do not address this exposure. D&O coverage does.

What a D&O Policy Covers and What It Doesn’t

A D&O policy consists of three coverage parts. Side A covers individual directors and officers directly when the company cannot or will not indemnify them, typically in bankruptcy or regulatory proceedings. Side B reimburses the company for indemnification it provides to directors and officers. Side C covers the company entity itself for certain securities claims. This coverage is more relevant for public companies but is increasingly included in private company D&O policies to cover securities-related claims arising from financing transactions.

The D&O market in 2026 is competitive, with flat to modestly declining premiums for well-governed private companies. Coverage for private companies with strong financial health and clean governance is broadly available and reasonably priced, which makes this a favorable time to put a program in place before a claim forces the issue.

The commercial insurance review that addresses D&O should confirm the policy covers the specific claim types most relevant to your business structure, that Side A coverage is not subject to conditions that could exhaust coverage before individuals are protected, and that coverage limits are adequate for your ownership structure and governance complexity. The specialty programs available for private company D&O are broader than many business owners assume.

Ready to make sure your directors and officers are protected as your business grows? The team at Tooher-Ferraris has been helping business owners structure complete commercial insurance programs since 1932. Contact us today to schedule a no-obligation consultation.

If cybercrime were a country, it would be the third-largest economy in the world. Munich Re projects global cybercrime costs will reach $14 trillion by 2028, exceeding the combined economic output of Germany, Japan, and India. The threat is not abstract, and it is not slowing down.

Here is what is also true: the cyber insurance market in 2026 is the most favorable for buyers it has been since the hard market peak of 2021. Rates are flat to declining across most commercial sectors. Carriers are competing for business. Coverage terms have expanded. The window will not stay open indefinitely.

That combination, an intensifying threat environment and a buyer-friendly market, creates a specific opportunity that most small and mid-size businesses are not actively taking advantage of.

Why the Current Market Window Matters

Cyber insurance pricing surged in 2020 and 2021 as ransomware attacks grew in frequency and severity. Carriers tightened terms, imposed sublimits, and raised rates sharply. Since 2022, competitive dynamics have prevailed, driving year-over-year rate reductions. According to a 2026 cyber market outlook report, that softening continued through 2025 and into 2026, with widespread opportunities for premium reductions and expanded coverage options across the broader market.

The practical implication: businesses that are underinsured, carrying outdated policy terms, or have never had a formal cyber coverage review can address those gaps right now at a cost that would have been significantly higher three or four years ago.

Early indicators in 2026 suggest the rate of market softening is decelerating. Ransomware losses, AI-enabled attacks, and systemic events could accelerate a return to harder conditions faster than most buyers expect. The businesses that act now lock in competitive terms. Those that wait may face the same renewal conversation at a different price.

What Ransomware and AI Are Doing to the Risk Landscape

The threat landscape has not softened alongside the market. Ransomware remains the dominant driver of cyber losses. According to Allianz Commercial’s 2025 cyber security resilience data, ransomware accounted for approximately 60 percent of the value of large cyber insurance claims. The FBI’s Internet Crime Complaint Center logged more than 193,000 phishing and spoofing complaints in 2024, with wire fraud losses exceeding $109 million.

AI is adding a new dimension. Artificial intelligence allows bad actors to automate processes that were previously manual — identifying vulnerabilities, personalizing phishing campaigns, and deploying attacks at scale with speed and precision that older security controls were not designed to handle. AI-generated deepfakes are now being weaponized in phishing campaigns, creating synthetic attacks that are exponentially more difficult to detect. Supply chain attacks, where a compromise at a vendor or software provider cascades to hundreds of clients, represent a systemic exposure that most individual business cyber policies address imperfectly.

What Good Cyber Coverage Looks Like in 2026

A cyber policy that was adequate in 2022 may have meaningful gaps today. Limits adequacy is the most common gap. Many businesses carry $1 million in cyber coverage and assume that is sufficient. Given average ransomware demands, business interruption costs, regulatory notification expenses, and breach response costs for even a mid-size incident, that limit can be consumed before litigation costs are factored in. Business email compromise coverage should be explicit in the policy. Vendor and supply chain coverage is an emerging requirement for businesses reliant on third-party technology providers. Reviewing your commercial insurance program specifically for cyber gaps, including what your general liability and property policies do and do not cover for cyber events, is the right starting point. Most standard commercial policies contain cyber exclusions that leave businesses with no coverage at all for a significant incident.

Ready to make sure your cyber coverage reflects the threat environment of 2026? The team at Tooher-Ferraris has been helping businesses navigate complex insurance decisions since 1932. Contact us today to schedule a no-obligation consultation.

Ask most small business owners what their risk management program looks like and you will get one of two answers: a description of their insurance policies, or a blank look.

Insurance is a risk management tool. It is not a risk management program. The distinction matters because insurance only addresses risks that have already happened. It pays for losses after the fact. Risk management addresses what leads to those losses: the exposures, the controls, the monitoring, and the financial planning that determine how well a business weathers a serious disruption.

The framework below is not complicated. It is four questions that, answered honestly, tell you where your business stands and what to do about it.

Identify: What Could Actually Hurt Your Business?

Risk identification is the starting point most businesses skip. It requires stepping back from the day-to-day and asking: what scenarios could seriously damage or destroy this business?

The categories are consistent across most small businesses. Property damage, including fire, flood, theft, and equipment failure, can interrupt operations and generate repair or replacement costs that a business cannot absorb without insurance or sufficient reserves. Liability claims, including those arising from a customer injured on your premises, a product defect, or a professional error, can trigger lawsuits that outlast the underlying incident. Workforce disruptions, including a key employee being injured or incapacitated, labor shortages, and workers’ compensation claims, can affect operational continuity. Financial and cyber risks, including fraud, ransomware, business email compromise, and regulatory penalties, are increasingly common even for businesses that would not describe themselves as technology-dependent.

According to the Federal Emergency Management Agency, approximately 40 percent of small businesses do not reopen after a natural disaster. The businesses that do recover consistently share one characteristic: they had thought through the scenario before it happened.

Assess, Control, and Transfer: The Full Framework

A risk assessment forces prioritization: for each identified exposure, how likely is it to occur, and how severe would the impact be if it did? High likelihood and high severity risks deserve the most immediate attention, both in terms of prevention and insurance. Low likelihood risks with catastrophic potential — a major product liability suit, a significant natural disaster — may warrant insurance even when the probability is low, because the financial impact of not being covered is existential.

Loss control is where the insurance bill and the risk management program intersect. Carriers look at your loss control practices when underwriting your coverage and businesses with formal safety protocols, documented procedures, and evidence of risk management investment consistently receive better terms than those without.

The Dynamic Risk Synergy Portal provides practical loss control tools that help small businesses identify and address operational vulnerabilities before they become claims. The final step is ensuring the risks that cannot be retained are properly transferred and that requires a thorough commercial insurance review confirming that coverage limits are adequate, exclusions are understood, and gaps between policies are identified. Risk management and insurance work together. The businesses that treat insurance as a last resort rather than a planning tool consistently discover their gaps when they can least afford to.

Ready to build a risk management program for your business, not just an insurance policy? The team at Tooher-Ferraris has been helping small and mid-size businesses manage risk intelligently since 1932. Contact us today to schedule a no-obligation consultation.

For decades, captive insurance was a tool that large corporations used and mid-market businesses read about. The capital requirements, administrative complexity, and domicile setup costs kept most companies below a certain threshold on the outside looking in. That is changing and in 2026, it is changing fast.

The global captive insurance market was valued at approximately $79 billion in 2024. According to Zion Market Research, it is projected to reach $120 billion by 2034 and the growth is no longer concentrated at the top of the market. Protected cell companies, group captives, and cell structures are making captive access viable for businesses that would have been turned away a decade ago. The Cayman Islands, one of the leading captive domiciles, formed more captive licenses in the first half of 2025 than in all of 2024 combined.

The companies driving that growth are not Fortune 500 firms. They are mid-market manufacturers, construction companies, transportation businesses, and professional services firms that have gotten tired of absorbing volatile insurance market swings and are ready to take more control of their risk financing.

What a Captive Actually Is and What It Isn’t

A captive insurance company is a licensed insurance entity owned and controlled by the business it insures. Instead of paying premiums to a third-party carrier and having underwriting profit accumulate on the carrier’s balance sheet, the business retains a portion of that risk and, in favorable loss years, retains the underwriting profit as well.

Captives are not self-insurance. They are licensed, regulated insurance entities with formal governance, actuarial pricing, and reinsurance structures. A business operating through a captive still transfers catastrophic risk to the commercial market. The captive typically sits in the primary or lower layers of an insurance program, with excess reinsurance providing coverage for large or unusual losses.

Group captives allow multiple companies, often operating in the same or similar industries with comparable risk profiles and safety cultures, to share the structure and its costs. A single mid-market company may not have the premium volume to justify a standalone captive, but participating in a group captive provides many of the same benefits, including premium stability, underwriting profit retention, improved data visibility, and insulation from market volatility.

Why Mid-Market Companies Are Entering the Captive Market in 2026

The commercial insurance market for certain lines has created conditions that make captives increasingly attractive. General liability, commercial auto, and umbrella/excess carriers have restricted capacity and raised rates for accounts with adverse loss experience or sector-based concerns. Social inflation, driven by nuclear verdicts, third-party litigation funding, and expanding theories of liability, continues pushing claim severity upward in ways that affect pricing broadly, not just for accounts with poor loss history.

Businesses that invest in safety, training, fleet management, and operational discipline are often priced alongside peers who do not because traditional carriers can only underwrite the visible data. A captive rewards discipline directly: better loss performance means better financial outcomes for the captive owner, not for the carrier.

The captive insurance solutions conversation typically starts with a feasibility study, which is an actuarial and financial analysis of whether the business’s premium volume, risk profile, and financial position support captive participation. Companies paying more than $500,000 annually for general liability, auto, and umbrella coverage are often strong candidates, though group structures lower that threshold considerably.

How to Know If Your Business Is a Candidate

The strongest captive candidates share a few characteristics: consistent, well-managed risk profiles with investment in loss control; stable premium history without major unfavorable claims trends; financial discipline and sufficient working capital to fund the retained layer; and leadership willing to treat risk financing as a long-term strategy rather than a transactional annual renewal.

If your business fits that profile and you are regularly absorbing commercial market volatility without a clear mechanism to insulate yourself from it, a captive feasibility conversation is worth having before your next renewal, not after it.

Ready to explore whether captive insurance belongs in your risk financing strategy? The team at Tooher-Ferraris has been helping businesses evaluate and structure alternative risk programs since 1932. Contact us today to schedule a no-obligation consultation.

Your commercial property policy covers your building. Your general liability covers third-party bodily injury and property damage. What covers the $80,000 excavator parked at a job site three towns over?

For many contractors, the honest answer is: nothing.

Construction is a mobile industry. Tools travel between job sites, equipment gets staged at temporary locations, materials sit on flatbeds overnight, and rented machinery moves in and out of projects daily. Standard commercial property policies are built around fixed locations, and they typically do not follow your assets when they leave the building. That gap is an inland marine exposure, and closing it is one of the most overlooked steps in a contractor’s insurance program.

What Standard Property Policies Don’t Cover

Commercial property insurance is designed to protect assets at a scheduled location — your office, your yard, your warehouse. When equipment leaves that location, most standard policies either exclude coverage entirely or impose sub-limits that bear no relationship to actual replacement costs.

The gaps vary by policy, but contractors commonly find that standard commercial property coverage does not adequately protect tools and equipment stored at or transported to temporary job sites, equipment in transit between locations, rented or leased machinery the contractor is responsible for under contract, materials stored off-premises awaiting delivery, or mobile equipment like compressors, generators, and forklifts that move regularly.

This is not a fringe concern. According to the National Equipment Register, construction equipment theft costs the US industry an estimated $400 million annually, and those losses disproportionately impact small and mid-sized contractors who cannot absorb a six-figure replacement without disrupting active projects. According to Gallagher’s 2026 market outlook, construction-related replacement costs remain 15 to 20% above pre-pandemic levels — which means a piece of equipment stolen or destroyed today costs significantly more to replace than the value on your current schedule.

What Inland Marine Insurance Actually Does

Despite its name, inland marine has nothing to do with water. The term originates from the insurance industry’s historical distinction between ocean cargo and goods transported over land. For contractors, an inland marine policy — often called a contractor’s equipment floater — is specifically designed to protect property that moves.

Coverage typically includes owned tools and equipment wherever they are located, whether on a job site, in transit, or at a storage facility. High-value scheduled items like cranes, excavators, and lifts can be listed individually with agreed value coverage. Blanket limits cover unscheduled tools and small equipment up to a per-item and aggregate cap. Equipment you rent or borrow and are contractually responsible for can also be included, as can technology tools used in the field.

Coverage terms vary significantly by policy, so reviewing the specific causes of loss, deductibles, and any exclusions for unattended equipment is essential. Many policies, for instance, exclude theft from an unattended vehicle unless there is visible evidence of forced entry — a detail that surfaces at claim time in ways contractors do not anticipate.

The Right Time to Review Is Before You Need It

The specialty programs available to contractors in 2026 include highly competitive inland marine options, even for accounts with prior claims. An inland marine review should include a current equipment inventory compared against your commercial insurance policy schedule, a check on rented equipment obligations and whether they’re covered, and a look at transit exposures for materials and tools in transit between sites. OSHA’s ongoing emphasis on jobsite safety equipment standards is a timely reminder that the tools enabling compliance with those standards need their own protection when they are off your property.

Ready to make sure your tools and equipment are actually covered everywhere your business operates? The team at Tooher-Ferraris has been helping contractors protect their assets since 1932. Contact us today to schedule a no-obligation consultation.

When did you last sit down and go through your equipment schedule, line by line?

For most contractors, the honest answer is: at some point during the original policy setup, and not since. That is a problem — and in 2026, it is a more expensive problem than it used to be.

Construction replacement costs remain elevated across the board. Equipment values have shifted. Over the course of a busy year, you have likely added tools, acquired new machinery, sold off old assets, or taken on rented equipment under contract. Some items on your current schedule may no longer exist. Others that do exist are not listed at all. That mismatch between what you own and what your insurance program actually covers is underinsurance and most contractors do not discover it until a claim forces the issue.

Why Equipment Schedules Go Stale

Insurance schedules are snapshots. They capture the state of your operation at the time the policy was written or last formally updated. Between renewals, equipment changes constantly — purchases, disposals, lease returns, rental agreements that come and go with specific projects. Most of those changes never reach your broker.

The result is a schedule that may reflect your operation from two or three years ago. According to Gallagher’s 2026 market analysis, construction-related replacement costs remain 15 to 20% above pre-pandemic levels. An excavator that cost $120,000 in 2021 may cost $140,000 or more to replace today. If your scheduled value is still $120,000, you will absorb that gap out of pocket after a total loss.

According to Sentry Insurance’s 2026 Construction Outlook, contractors who have not updated their equipment and property values within the last 12 months face the real possibility of discovering a coverage shortfall mid-loss when there is no opportunity to correct it. Beyond the dollar impact on a single claim, many inland marine and equipment floater policies include coinsurance provisions. If declared values are significantly below actual replacement cost, the insurer may apply a coinsurance penalty that reduces the payout on even a partial loss.

What a Good Equipment Audit Actually Looks Like

An equipment schedule review does not need to be a major project. At its core, it is a structured comparison of what you own against what is listed on your policy, followed by a conversation with your broker about whether the values, coverage structure, and deductibles still match your operation.

In practice, that means pulling your current equipment list from your fixed asset records and comparing it item by item to the policy schedule, identifying items that appear on the schedule but have been sold, returned, or written off, adding any equipment acquired during the policy period that is not currently listed, and updating scheduled values to reflect current replacement costs rather than depreciated book values.

One category contractors consistently miss: technology and field equipment. Laptops, tablets, GPS units, and laser measurement devices have real replacement costs. They also travel with crews daily, making them some of the most exposed assets on your program. Most were not on anyone’s radar when the original policy was set up years ago.

When to Do It — and How Often

The most natural time is 60 to 90 days before your policy renewal, giving your broker room to market updated values and structure coverage before the new period begins. The Dynamic Risk Synergy Portal offers loss control resources that complement a commercial insurance coverage review, helping identify both operational gaps and insurance program vulnerabilities before they become claims. At minimum, a formal equipment schedule review should happen once a year. If you have had a significant year — major acquisitions, new project types, expanded operations — more frequent reviews are warranted. Your insurance program is only as accurate as the information behind it.

Ready to make sure your equipment coverage reflects what your business actually owns? The team at Tooher-Ferraris has been helping contractors build accurate, complete insurance programs since 1932. Contact us today to schedule a no-obligation consultation.

For many contractors, the biggest obstacle to winning a project isn’t pricing, experience, or qualifications. It’s bonding capacity.

As public and private project opportunities continue to grow in 2026, many contractors are discovering that securing a surety bond is no longer as routine as it once was. Sureties are taking a closer look at financial strength, backlog, cash flow, and overall business performance before extending credit. A contractor who qualified easily a year ago may find today’s underwriting process far more demanding.

The surety market remains financially strong, but underwriting standards are becoming more selective. Contractors who understand these changes and prepare for them well before bid day will be in a much stronger position to pursue larger opportunities, expand into new markets, and keep projects moving without costly surprises.

Why the Window Is Narrowing

The U.S. surety market has enjoyed what analysts at AM Best described as a “golden era of profitability,” with net profit margins above 30% for 11 consecutive years through 2024. Loss ratios stayed well below industry averages, fueled by steady public construction spending tied to the Infrastructure Investment and Jobs Act and other federal programs.

That runway is shortening. IIJA funding is set to expire in September 2026, and the pipeline of federally backed public work that has sustained contractor backlogs is expected to thin as a result. The Associated Builders and Contractors’ Construction Backlog Indicator stood at 8.1 months in February 2026 — a healthy figure — but analysts are already projecting softening in certain sectors as infrastructure dollars wind down.

At the same time, sureties have become more selective about which contractors they support. According to a 2026 surety and construction forecast published by TSIB Inc., sureties are scrutinizing cash flow, underbilling trends, WIP report accuracy, and reliance on key personnel more closely than in recent years — particularly for mid-market contractors pursuing projects larger than their historical track record. The margin for error has narrowed.

What Sureties Are Actually Looking At

Understanding how sureties evaluate bonding requests is the first step toward protecting and growing your capacity. The three C’s of surety underwriting — Character, Capacity, and Capital — remain the core framework. In practice, here is where smaller contractors most often run into trouble.

Financial statements: Sureties increasingly expect CPA-prepared financials, not internally generated reports. If your financials are reviewed rather than compiled or audited, that puts you at a disadvantage on larger projects.

WIP schedules: A current, accurate work-in-progress report is non-negotiable for contractors seeking meaningful bonding capacity. Underbilling patterns and cost overruns on open jobs are red flags that trigger capacity reductions.

Cash flow documentation: Sureties want to see that your business generates consistent cash, not just revenue. Thin margins on recent projects or heavy reliance on a single large customer are concerns underwriters will raise.

Bank lines of credit: Having an established, unused banking relationship signals financial discipline. Contractors without a credit line often find their bonding capacity limited as a result.

How to Strengthen Your Position Before Q4

If public work is part of your growth plan, or if you simply want to protect access to bonded projects you already pursue, the time to address these items is now, before post-IIJA competition for available work intensifies.

Start by requesting a prequalification review with your surety bond producer. This is a diagnostic conversation about your current financial position, WIP, and the capacity you will need over the next 12 to 18 months. Many contractors skip this step until they are already mid-bid, which is too late to fix the issues sureties will surface.

Make sure your CPA understands construction accounting. Job costing, percentage-of-completion revenue recognition, and proper WIP accounting are specialized areas where general-purpose firms sometimes miss the mark. Sureties notice.

As part of a broader commercial insurance review, your surety bond program should be evaluated annually — not just at renewal, and not just when a large project is on the table. The surety market still has capacity. Access it on your terms by treating bonding as a strategic relationship, not a transaction.

Ready to review your surety bonding position? The team at Tooher-Ferraris has been helping contractors navigate the bond market and protect their ability to win work since 1932. Contact us today to schedule a no-obligation consultation.