Commitments and Contingencies |
12 Months Ended |
|---|---|
Dec. 31, 2025 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies |
COMMITMENTS AND CONTINGENCIES Legal – E&O and Other Considerations
As an E&S and Admitted markets intermediary, the Company faces ordinary course of business E&O exposure. The
Company also has potential E&O risk if an insurance carrier with which Ryan Specialty placed coverage denies coverage
for a claim or pays less than the insured believes is the full amount owed. The Company seeks to resolve, through
commercial accommodations, certain matters to limit the economic exposure, including potential legal fees, and
reputational risk created by E&O matters as well as disagreements between a carrier and the insured.
The Company utilizes insurance to provide protection from E&O liabilities that may arise during the ordinary course of
business. Ryan Specialty’s E&O insurance provides aggregate coverage for E&O losses up to $150.0 million in excess of a
per claim retention amount of $5.0 million. The Company periodically determines a range of possible outcomes using the
best available information that relies, in part, on projecting historical claim data into the future. Loss contingencies of $3.2
million and $4.9 million were recorded for outstanding matters as of December 31, 2025 and 2024, respectively. Loss
contingencies exclude the impact of any loss recoveries. The Company recognized the net impact of loss contingencies and
any loss recoveries of $4.0 million, $1.8 million, and $6.9 million of E&O expense for the years ended December 31, 2025,
2024, and 2023, respectively, in General and administrative expense on the Consolidated Statements of Income. The
historical claim and commercial accommodation data used to project the current estimates may not be indicative of future
claim activity. Thus, the estimates could change in the future as more information becomes known, which could materially
impact the amounts reported and disclosed herein.
During 2022, the Company placed certain insurance policies through a trading partner with the understanding that the
policies were underwritten by highly rated insurance capital. The policies were instead underwritten by an insurance carrier
that was not considered satisfactory by the Company or the insureds. The Company committed to securing replacement
coverage, to the extent commercially available, from highly rated insurance companies on terms substantially similar to the
insurance coverage originally agreed upon. As a result of this unusual circumstance, the Company incurred losses arising
from the original placements and unpaid covered claims (collectively, the “Replacement Costs”).
The Company recognized an estimated loss contingency related to the Replacement Costs of $0.3 million and a loss
recovery related to the claim for Replacement Costs of $20.2 million within Accounts payable and accrued liabilities and
Other current assets, respectively, on the Consolidated Balance Sheets as of December 31, 2024. During the year ended
December 31, 2025, the Company collected $22.1 million from its E&O insurance carriers related to the claim for the
Replacement Costs and there was no remaining loss recovery outstanding at December 31, 2025. In the aggregate, the loss
contingency and related loss recovery resulted in a $2.5 million expense recognized in the year ended December 31, 2022,
and no further expense related to this matter has been recognized since. The Company does not expect any additional
Replacement Costs to arise in relation to this matter.
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