Wrongful Act

February 2008

A common misconception about D&O liability insurance is that the term wrongful act is always broadly defined and that there is little difference between policy forms in the language used for this definition. Although all policies reviewed for The D&O Book contained a definition of wrongful act, the language varied widely. The definition is extremely important because it is a primary component of the policy insuring agreements. As such, the definition is fundamental to the scope of coverage provided by the policy. Unfortunately, over the years changes in policy wording have often narrowed the scope of coverage. Changes in the definition of wrongful act are illustrated in the following examples.