Does D&O Cover Fraud?

Triple-I lists fraud among standard D&O exclusions. In some forms, the exclusion applies only after a final, non-appealable adjudication or uses other conduct triggers; other wording may be broader. That distinction can matter because a complaint’s allegation is not itself a final finding, while defense costs may be handled separately or recouped later. The Travelers specimen contains intentional-dishonesty and fraud language, but it is an older carrier form. Read the precise exclusion, who must establish the conduct, whether it applies severally to each insured, and what happens to defense expenses after a determination.

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.