Does D&O Cover Fines?
D&O fines and penalties are commonly excluded unless the policy and applicable law permit coverage.
Do not count on coverage for taxes, sanctions, or penalties without explicit policy language.
Even where the policy funds a covered defense or settlement, a fine may be outside the definition of loss. Whether a civil or regulatory penalty is legally insurable depends on the jurisdiction and type of penalty; the Federal Reserve source addresses only regulated financial institutions and should not be generalized to all companies. A/B/C does not settle insurability. Read the loss definition and fines-or-penalties exclusion, identify any state-law limitation, and ask counsel about the specific penalty. Also distinguish a fine from defense expenses, restitution, or a settlement, which may have different treatment and allocation.
Coverage Guides Related to D&O Insurance
Sources for This Answer
- SR 19-12: Statement Regarding Insurance Policies for Directors and Officers. Board of Governors of the Federal Reserve System; Applicability; Policy Considerations for Indemnification Insurance Policies; form/document version July 23, 2019. Accessed 2026-09-25.
- Private Company Directors and Officers Liability Coverage. Travelers Casualty and Surety Company of America; I.A–C p.1; III.A–E pp.1–2; III.J–M pp.2–3; IV Exclusions pp.3–4; VI Defense and Settlement pp.6–7; form version PDO-3001 Ed. 01-09. Accessed 2026-09-25.