If you look at your Directors & Officers (D&O) or Professional Indemnity (PI) insurance policy wording, you might see that there is coverage for “fines and penalties”. However, if you are operating in Singapore under Monetary Authority of Singapore’s (MAS) watch, your policy will usually help with defence and investigation costs if the claim is valid — but there are some complications about coverage for fines and penalties.
Here’s why, and what that means for your D&O, PI and Investment Manager Insurance (IMI), especially if you are in the Fintech / Finance space, regulated by MAS.
The view of regulators and the courts: accountability first
MAS and the justice system has made it known that clients should not rely on insurance (or indemnities) to soften the sting of regulatory penalties. The logic is simple: if managers know a policy will just pay their fine, it undermines accountability.
That doesn’t mean insurance is useless. In fact, most D&O and PI policies in Singapore are designed to cover:
- Legal fees for defence
- Costs of responding to MAS investigations
- Civil settlements or compensatory damages
But when it comes to fines and penalties, the policy will usually say “where insurable by law.” Under Singapore law and public policy, it is not explicit if fines can or cannot be covered. However based on English law and some past precedence we think we can publicly state the points below.
What’s never covered
Fraud by an insured person, intentional, or reckless conduct beyond just an error or omission is a common exclusion in most policies. If a fine or penalty arises from this, insurers won’t pay and might choose to claw back defence costs. This would normally include also being fined for or admitting to “criminal negligence” or “connivance”.
This means that while the policy wording may dangle the phrase “civil fines and penalties where insurable by law”, the circumstances where a MAS fine could ever be paid are limited as fines from MAS are normally related to fraud or an intentional act.
What can clearly be covered
Whilst the case is ongoing, the defence costs and PR costs will be covered as long as you have not admitted liability or have not been fined yet. This allows you to get expert legal advice on what possible actions you can take to avoid making the situation worse (getting criminal charges filed against you for example) or how to factually present your points to reduce the severity of the investigation or resolve the investigation quickly.
Why the right broker matters
The difference between a frustrating claim and a smooth one often comes down to your broker:
- Understanding the exact coverage and exclusions wording and the insurer’s intent
- Knowing what documents the insurer needs to review your case
- Knowing how to factually present and effectively support your case to an insurer that aligns with coverage
- Knowing the next steps in the claims process and preparing for it so you are not reacting to unplanned surprises
- Knowing what can be negotiated with the insurer and what cannot be negotiated to get a positive and fair outcome quickly
A trusted and experienced broker like Anapi can help you navigate this grey zone and maximise coverage options during a claim. We work closely with multiple specialty insurers to understand their intent and have guided numerous fintech and financial institution clients through past regulatory investigations. Our role is to advise where coverage may be extended, explain the claims and dispute process, and highlight which arguments are likely to succeed — and, just as importantly, which will not — so you can quickly understand all your options and reach a fair outcome.
Final word
Ensure your insurance programme is structured — and your broker experienced — to cover the real costs of investigations, defence, and civil claims, because that’s where expenses escalate quickly.
If you’re unsure how your policy would respond, now is the time to have that conversation with your broker — not after MAS comes calling.
