|
|
| Directors & Officers Liability |
|
 |
|
|
Private Companies:
The decisions made by the boards of privately owned companies are not immune from public scrutiny.
As leaders of the company, the directors and officers can be held personally liable for their management decisions. Shareholders, employees, customers, suppliers, competitors, and even the government can sue your privately owned company and its board.
Director's and Officers Liability Insurance coverage is specifically designed to help protect the personal assets of a privately owned company's directors and officers, as well as the financial well-being of the company itself.
Claim Examples:
Description of Event
Resolution
Description of Event
Resolution
Description of Event
Resolution
Director buys company, then sues it
COVERAGE SECTION
DIRECTORS AND OFFICERS LIABILITY
Claim:
Misrepresentation
Company:
Privately held
Number of employees:
2
Annual revenue:
$2.9 million
Jones, a director and an officer for ABC Company, led an effort by ABC to purchase the assets and book of business of XYZ Inc. Jones and ABC were both minority shareholders of XYZ. After the purchase was completed, Jones and ABC brought suit against XYZ and its directors and officers, alleging that it had made misrepresentations in connection with the purchase and sale of XYZ. Jones and ABC demanded $800,000 in damages from XYZ.
A settlement was reached whereby XYZ paid the plaintiffs Jones and ABC $400,000. XYZ also incurred nearly $150,000 in defense costs.
A cashless settlement
COVERAGE SECTION
DIRECTORS AND OFFICERS LIABILITY
Claim:
Unfair competition
Company:
Privately held
Number of employees:
22
Annual revenue:
$650,000
Smith, the former CEO of XYZ Inc., left the company to start up a new software firm, New Co. Soon afterward, XYZ sued Smith individually as an officer of New Co., alleging that Smith had taken with him a corporate license to market certain software. XYZ's allegations included tortuous interference, trademark infringement, and unfair competition. In its suit, XYZ demanded $10 million in damages, as well as punitive damages.
Smith settled with New Co. for a payment of $100,000. Additionally, Smith accumulated $245,000 in defense expenses.
Theft of trade secrets
COVERAGE SECTION
DIRECTORS AND OFFICERS LIABILITY
Claim:
Theft of trade secrets
Insured:
XYZ, Inc.
Company:
Privately held
Number of employees:
325
Annual revenue:
$80 million
ABC Company sued directors and officers of competitor XYZ Inc. after three employees of ABC left to join XYZ. ABC alleged that the three were still employed by ABC when they began sharing proprietary information with XYZ. In its suit, ABC charged theft of trade secrets. After more than a year of legal wrangling, the case settled.
XYZ agreed to pay ABC $160,000 as a settlement, but not before incurring $355,000 in defense costs.
|
|
|
|
|
Toll Free: Los Angeles County Fax: Orange County Fax: |
(800) 228-6630 (818) 244-5027 (949) 851-8929 |
|
Los Angeles County 200 West Glenoaks Boulevard Suite #200 Glendale, California 91222-0308 |
Orange County 20162 S.W. Birch Street Suite #350 Newport Beach, California 92660 |
Contact Us: jcarmack@carmackinsurance.com |
Copyright © Carmack Insurance
| web site designed and hosted by |  |