Does D&O Cover Fraud?
D&O fraud allegations may receive a defense, but proven intentional fraud is commonly excluded from covered loss.
Some forms apply the conduct exclusion only after a final, non-appealable adjudication. Compare that trigger and any repayment obligation for defense costs.
Fraud allegations and established fraud can be treated differently. A conduct exclusion may bar loss only after a final adjudication, or may use a broader trigger; defense expenses can be advanced before that point and later recouped under some forms. Side A/B/C grants do not override the exclusion, though severability wording may distinguish one insured’s conduct from another’s. Check who must be found to have acted, whether the finding must be final, whether the exclusion applies to defense costs, and what happens to innocent insureds. Triple-I lists fraud as a common exclusion, but the issued wording controls.
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