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While relaxed regulations may seem business-friendly, they can introduce lasting professional liability risks. Shifting policies, global compliance demands, and changes to DEI/ESG practices may drive litigation—making vigilance and strategic risk management essential.
Published on May 14, 2025
After four years of aggressive regulatory policies, increased enforcement action and heightened government emphasis on corporate accountability, the US regulatory environment has reached an inflection point. Today, there are significant implications for professional liability risk—and for the way brokers and insureds need to think about the space.
Relaxed government standards may bring increased professional liability risk
The new US administration has promised more “corporate friendly” policies, and changes such as deregulation and a reduction in corporate tax could reduce litigation activity and attendant costs.
However, executive actions could also have broader longer-term consequences—potentially damaging corporate and investor confidence and leading to expanded claims over time.
Deregulation in the banking industry, for instance, may mean fewer fines and penalties in the short term. But if the past is any guide, the relaxation of external controls may pose risks for banking entities’ long-term health. For example, the 1999 repeal of the Glass-Steagall Act preceded an increase in riskier business practices. The consequences came home to roost during the financial crisis of 2008, when, in the words of one commenter, “Insurers paid out massive claims tied to fiduciary breaches, poor governance, and failures in risk management.”1
FCPA violations committed today could remain subject to prosecution over the next five years or more.
A similar scenario could result from a pullback in Foreign Corrupt Practices Act (FCPA) enforcement. FCPA violations committed today could remain subject to prosecution over the next five years or more, depending on the priorities of the next administration to take office. Further complicating matters, the FCPA is not the only anti-bribery law that applies to companies with international operations.2 It is very unlikely countries with anti-bribery laws, such as the U.K.’s Bribery Act of 2010, will have a similar near-term reduction of enforcement. Companies must continue to remain vigilant in their staff training and internal controls to prevent bribery risk.
It is also important for insureds to understand that although corporate-friendly policies may reduce regulation, this shift does not necessarily translate to a reduction in private litigation. The whipsaw in policy is likely to alter the litigation environment, not eliminate it.
Effective portfolio management practices can help minimize professional liability risks
Likewise, changed tariff and trade policies could lead to increased execution risk for multinational companies in carriers’ portfolios who may have to overhaul their production facilities and supplier networks.3 Supply chain disruption-related lawsuits filed during and after the COVID-19 pandemic give us a preview of what could develop if tariffs disrupt delivery from existing supply chains and companies shift to alternatives that are less efficient or more costly. Reshoring strategies will take time, and capital investments carry execution risk. Disclosures to shareholders on both fronts may provide shareholders and plaintiff attorneys with an opportunity to allege misleading statements were made if the company fails in its transition efforts. The plaintiffs’ bar may intensify its focus on stock declines that emanate from tariffs and supply chain impacts.
Despite seemingly favorable short-term changes in government regulation, carriers’ practices in professional liability need to demonstrate a healthy respect for longer-term accountability.
Another emerging risk may be government authorities, federal or state, or activist groups, launching litigation against companies that have DEI and ESG policies that do not align with the administration’s view. Additionally, companies who revise or end DEI or ESG policies may face a rise in litigation by employees alleging that updated employment practices are discriminatory, creating a “lose-lose” scenario.
Despite seemingly favorable short-term changes in government regulation, carriers’ practices in professional liability need to demonstrate a healthy respect for longer-term accountability—not just to protect insurers, but also insureds.
Corporate insureds who are thoughtful in how they respond to this evolving macroeconomic and geopolitical environment while being prudent with their disclosures will bolster their resiliency to face whatever professional liability obstacles may be coming their way. Underwriters will be taking these corporate actions/responses into consideration when evaluating insureds’ risk exposure, knowing that a relaxation of controls or disclosures could be costly down the road.
Markel's professional liability experience and strong understanding of US corporate liability risks enables us to guide insureds with sound strategies to manage risk and provide creative solutions for their professional liability coverage. Contact us to learn more.
1 Dwight Williams, National Director, Management Liability; and Alex Maza, D&O Product Leader, “How Deregulation Could Affect Your Financial Services Business,” Risk Strategies, Feb. 7, 2025, https://www.risk-strategies.com/blog/how-deregulation-could-affect-your-financial-services-business.
2 Stephen E. Frank, Sarah Heaton Concannon and Sam Nitze, “Reports of the death of Foreign Corrupt Practices Act may be exaggerated,” Reuters, Feb. 21, 2025, https://www.reuters.com/legal/legalindustry/reports-death-foreign-corrupt-practices-act-may-be-exaggerated-executive-order-2025-02-21/.
3 “Mapping the impact of tariffs on supply chains,” Bloomberg Professional Services, Jan. 28, 2025,
https://www.bloomberg.com/professional/insights/markets/mapping-the-impact-of-tariffs-on-supply-chains/.