The reelection of former President Donald Trump this week promises to usher in a starkly different administration and regulatory approach, scrambling the current risk landscape for directors and officers and their insurers.

Trump's return to the White House after four years promises to reshape the regulatory landscape and deregulate specific industries — an approach that could lighten the compliance and enforcement risks normally mitigated by D&O coverage while potentially heightening other claims and costs.

Experts who spoke to Law360 after election day broadly agreed that a lighter regulatory touch would likely produce fewer claims spurred by agencies like the Securities and Exchange Commission.

However, experts noted that a variety of factors would likely mean changes would be applied gradually and unequally, and that a more hands-off federal approach could maintain or even spur further scrutiny and action from others — generating more claims.

"I think you're going to see other stakeholders make claims, and I think the civil litigation system will make up for the easing of the regulatory enforcement system," policyholder-side attorney Joshua Gold of Anderson Kill told Law360. 

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Uncertainty Inherent to New Admin, Changing Times

There is an inherent tension between the insurance market, which relies on predictability, and Trump's style of governance, which often defies it.

"My view is that Donald Trump's approach is always somewhat unpredictable, so I wouldn't make any assumptions set in stone about what he might change at the SEC and what senior managers at publicly traded companies should concern themselves about," Gold told Law360.

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