Also known as: Malfeasance Meaning · Malfeasance Definition · Official Misconduct
A wrongful, unlawful, or intentionally harmful act—especially by someone in a position of trust such as a director, officer, or public official.
Malfeasance is the commission of an act that is outright wrongful or unlawful, particularly by someone with a duty of trust. It is distinguished from misfeasance (performing a lawful act improperly) and nonfeasance (failing to act when there is a duty to). In a business and insurance context, malfeasance by directors and officers can trigger lawsuits addressed by D&O insurance — but because it involves intentional wrongdoing, deliberate fraud or criminal malfeasance is typically excluded from coverage.
Malfeasance is a wrongful or unlawful act committed intentionally, especially by a person in a position of trust or authority such as a corporate officer or public official. It means doing something you have no legal right to do. In business, examples include fraud, misappropriation of funds, or knowingly violating the law in your official capacity.
Malfeasance is doing something that is inherently wrongful or illegal. Misfeasance is performing a lawful act in an improper or negligent way. Nonfeasance is failing to act when you had a duty to do so. All three can lead to liability, but they describe different kinds of misconduct — from outright wrongdoing (malfeasance) to careless execution (misfeasance) to inaction (nonfeasance).
D&O insurance defends directors and officers against allegations of malfeasance, including the legal costs of fighting such claims. However, if wrongful conduct such as deliberate fraud or a criminal act is finally adjudicated (proven), the policy's conduct exclusions typically bar coverage for that individual. This is why the wording and carve-backs of the fraud and personal-profit exclusions matter so much.
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.