Recent Legal Trends Affecting Director and Officer Liability 

For 2025, directors’ and officers’ liability and insurance should continue to evolve, shaped by recent legal trends and high-profile legal cases. The actions, or inactions, of directors and officers play a crucial role in steering the strategic direction of both private and public companies. Such decisions have significant implications not only for their organizations but also for shareholders, employees, consumers, and the broader economy. As such, directors and officers are subjected to increasing scrutiny and legal challenges, particularly as the regulatory climate grows more complex and the prevalence of shareholder activism intensifies. Notable trends are:

  • Continued emphasis on environmental, social, and governance (ESG). Regulators and stakeholders alike are continuing to hold corporate leaders accountable for implementing and maintaining robust ESG policies. ESG should continue to remain contentious, facing backlash from various political groups, resulting in complex litigations and legislation. Major companies are likely to scale back diversity, equity and inclusion (DEI) initiatives due to activist pressure and changing social views. 
  • Cybersecurity and data privacy will remain critical areas of concern. As cyber threats become more sophisticated and pervasive, companies (and public agencies) are under increased pressure to protect sensitive data and ensure compliance with a patchwork of federal and state data protection regulations. Cybersecurity-related D&O liability risks are prominent in corporate litigation, with notable cases like Alphabet's $350 million settlement in 2024. New lawsuits, such as those against CrowdStrike and PDD Holdings, reflect evolving trends, focusing on IT disruptions and self-inflicted malware issues rather than traditional breaches. The SEC's recent guidelines on cybersecurity disclosures could drive new litigation as companies adjust to new reporting standards. 
  • The rapid development of artificial intelligence (AI) technology has sparked increasing litigation and a complex regulatory environment, suggesting continued legal challenges and regulatory actions in the future. Companies face litigation for "AI washing" or not disclosing risks. 
  • Artificial Intelligence (AI) related disclosure requirements have spurred actions from the Securities and Exchange Commission for misleading investors about AI-enabled services. The EU passed a stringent AI law with severe penalties, and U.S. states like Colorado and California are enacting their own laws.
The dynamic nature of these challenges necessitates a deeper understanding of risk management and initiative-taking engagement in ethical business practices. As key legal cases similar to the following pave the way, the need for diligent oversight and transparent decision-making becomes paramount in navigating the sophisticated legal framework surrounding directors and officers in the modern corporate arena.