Hedge fund managers have been increasingly targeted by government regulators, most notably the SEC. The money ordered in SEC enforcement actions – comprised of civil penalties, disgorgement and prejudgment interest – can be significant and totaled $5 billion in fiscal year 2023 (FY2023). And the SEC is not the only potential source of regulatory scrutiny. For example, the CFTC obtained orders imposing more than $4.3 billion in restitution, disgorgement and civil monetary penalties in FY2023. With the specter of increased enforcement activity looming, hedge fund managers should assess whether their insurance programs do (or could) cover SEC-imposed fines and penalties as part of a broader risk mitigation strategy. This guest article by Geoffrey B. Fehling and Alex D. Pappas, attorneys at Hunton Andrews Kurth LLP, details factors hedge fund managers should consider, including lessons learned from recent enforcement activity and the applicable state-specific legal landscape, and explains how issues tend to arise in practice under directors and officers; management liability; and other claims-made insurance policies. The article concludes with several practice pointers for fund managers looking to maximize available insurance coverage in the event of unwanted regulatory scrutiny. See “SEC and CFTC 2023 Enforcement Results: Robust Enforcement Activity and Significant Monetary Sanctions” (Jan. 18, 2024).