01 / The meaning
What it means.
The phrase does not mean a court has already found wrongdoing. A policy can address allegations, with liability remaining disputed. Directors’ and officers’, management liability, professional indemnity and employment practices sections may each define the term differently. The relevant insured person, their capacity and the activity in which the conduct occurred are therefore central to deciding which definition should be read.
A broad definition is only one part of the insurance analysis. The claim must also meet the insuring clause, timing rules and other terms. Exclusions for dishonest or intentional conduct, prior knowledge or specified liabilities can limit the response, and their application may depend on carefully drafted conditions. Do not assume every breach of duty is insured or that merely alleging dishonesty automatically determines the whole claim.
02 / Put it in context
A practical example.
Hypothetical example: a company director is accused of giving misleading information during a transaction. The allegation is notified with the relevant documents. The business checks the wrongful-act definition, insured capacity and exclusions while the factual and legal issues remain unresolved.
This example illustrates the term. It does not predict a claim outcome.
03 / Read the detail
What to check.
- Identify the policy section’s exact definition and the person’s insured capacity.
- Check claim timing, prior-knowledge provisions and related-claim aggregation.
- Read conduct exclusions and any conditions governing when they apply.
04 / Start a useful conversation
A question for your broker.
Does the allegation concern conduct and an insured capacity within this section’s definition, before considering its other requirements and exclusions?
05 / Connect the terms
Keep the meaning in context.
06 / Apply it to your business
Related insurance guides.
Further reading
Read the source guidance alongside the relevant policy wording.
General information only. This does not take into account your objectives, financial situation or needs. Before acting, consider whether the information is appropriate for you. Cover is subject to insurer acceptance and the policy terms, conditions, limits and exclusions. Read the Financial Services Guide and the relevant PDS (where applicable) and/or policy wording before deciding.
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