An isolated driver device comprises a first semiconductor die and a second semiconductor die galvanically isolated from each other. The second semiconductor die includes a signal modulator circuit configured to modulate a carrier signal to produce a modulated signal encoding information. A galvanically isolated communication channel implemented in the first semiconductor die and the second semiconductor die is configured to transmit the modulated signal from the second semiconductor die to the first semiconductor die. The second semiconductor die includes: a fault detection circuit configured to detect electrical faults in the second semiconductor die; a logic circuit coupled to the fault detection circuit and configured to assert a modulation bypass signal in response to a fault being detected by the fault detection circuit; and modulation masking circuitry configured to force the modulated signal to a steady value over a plurality of periods of the carrier signal in response to the modulation bypass signal being asserted. The first semiconductor die includes a respective logic circuit sensitive to the modulated signal and configured to detect a condition where the modulated signal has a steady value over a plurality of periods of the carrier signal, and to assert a fault detection signal in response to the condition being detected.