Also known as: wrongful act · wrongful act definition · wrongful act coverage
A Wrongful Act is the defined trigger in a D&O, E&O, or management-liability policy, meaning the actual or alleged act, error, omission, misstatement, misleading statement, neglect, or breach of duty by an insured that gives rise to a covered claim.
A Wrongful Act is the specific conduct your policy agrees to cover, and it is one of the most important defined terms in the whole contract. In a Directors and Officers (D&O) policy it typically covers management decisions and duties, such as an alleged breach of fiduciary duty, a misleading statement to investors, or a neglectful board decision. In an Errors and Omissions (E&O) or professional liability policy it covers mistakes in the professional services you deliver, such as a coding error, a missed deadline, or bad advice. The exact wording in the policy's definitions section controls what counts, so a broad definition covers more alleged conduct and a narrow one leaves gaps. For a startup, that means the claim only triggers coverage if what you are accused of fits the policy's definition of a Wrongful Act.
A Wrongful Act is the conduct your management-liability policy is built to cover, usually defined as any actual or alleged act, error, omission, misstatement, misleading statement, neglect, or breach of duty by an insured. It is the trigger that connects an accusation to your coverage, so a claim is only covered if what you are accused of fits this definition. You will find the precise wording in the definitions section of a D&O, E&O, or management-liability policy.
In a D&O policy, a Wrongful Act relates to how directors and officers manage the company, for example board decisions, fiduciary duties, and statements to investors. In an E&O or professional liability policy, it relates to errors in the professional services you provide to clients, such as flawed work product, negligent advice, or a missed obligation. The category of conduct differs, but in both cases the policy's own definition controls what is actually covered.
Because coverage only responds when the allegation fits the definition, the breadth of that wording directly determines whether a claim is paid or denied. A broad definition captures a wide range of alleged conduct, while a narrow one can leave real exposures uncovered. Reviewing this term with your broker before binding is one of the highest-value checks you can make on a D&O or E&O policy.
Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.
Last updated: July 2026.