4 Examples of Directors and Officers Insurance Claims
If you are considering forgoing the D & O insurance for your business, you should know that you're taking a pretty big risk.
First, what is Directors and Officers insurance? D & O insurance protects your organization and your board of directors, as well as investors and venture capitalists in case any claims are made against your company.
What claims, you may ask? Well, the following four examples will show you exactly why you should secure a D & O policy for your business, regardless of size or industry.
The Non-Entity EPL Let's say you agreed to help form and work for a company as its Chief Financial Officer.
You are now bringing a suit against that company because you charge that you were terminated without due cause.
Furthermore, you're alleging that the company prevented you from finding alternative employment by claiming there is a non-compete agreement between you and the company.
In this type of claim, you would sue the company and its directors and officers for breach of contract and for unfair and deceptive trade practices.
Creditor Claim In this example, let's say you're bringing a complaint against a company's board of directors (Its CEO, CFO, COO, etc.
) because you charge that those officers conspired to use your services in order to furnish, install and repair the company's sound or computer equipment, knowing full well that the company was insolvent and was planning to file for Chapter 11 anyways.
The Inventor's Dispute Let's say you invented a medical device and that your former partner started a new company using your innovative technology without permission.
The technology was subject to a patent application which listed you as the sole inventor of the medical device.
Your former partner was supposed to file the application and wanted to be listed as a co-inventor.
When you refused, he withdrew the application, subsequently started his own business and submitted his own application for the patent listing himself as sole-inventor.
In this case, you would bring a claim against the company and its directors and officers (your former partner) for misappropriated technology, and the use of that technology to establish the new company.
Competitor Disputes Finally, you're suing a competitor alleging that a former employee, who is now working for that competitor, has engaged in unauthorized use of confidential and proprietary information.
Also, you're alleging that the employee engaged in other acts of unfair competition.
In this case, you might sue the company and its directors and officers for misappropriation of trade secrets, a violation of the Computer Fraud and Abuse Act, for unlawful access to stored information and for unfair competition.
These are just a few examples of why your company needs directors and officers insurance.
You never know when one of the above situations may strike your company, and you don't want to be on the other end of an expensive claim if you have no defense for the case.
The smart move is to secure a D & O policy so that you, your company, your board of directors, employees, volunteers and everyone else are well-protected in case any such claims are indeed brought against your organization for whatever reason.
What if you don't find the directors and officers insurance you want? I know how hard it can be to try and find the exact risk areas with your business that need coverage, but if you want to find out the real areas of risk and truly get insurance that will minimize the risk to the maximum extent possible.
look here.
First, what is Directors and Officers insurance? D & O insurance protects your organization and your board of directors, as well as investors and venture capitalists in case any claims are made against your company.
What claims, you may ask? Well, the following four examples will show you exactly why you should secure a D & O policy for your business, regardless of size or industry.
The Non-Entity EPL Let's say you agreed to help form and work for a company as its Chief Financial Officer.
You are now bringing a suit against that company because you charge that you were terminated without due cause.
Furthermore, you're alleging that the company prevented you from finding alternative employment by claiming there is a non-compete agreement between you and the company.
In this type of claim, you would sue the company and its directors and officers for breach of contract and for unfair and deceptive trade practices.
Creditor Claim In this example, let's say you're bringing a complaint against a company's board of directors (Its CEO, CFO, COO, etc.
) because you charge that those officers conspired to use your services in order to furnish, install and repair the company's sound or computer equipment, knowing full well that the company was insolvent and was planning to file for Chapter 11 anyways.
The Inventor's Dispute Let's say you invented a medical device and that your former partner started a new company using your innovative technology without permission.
The technology was subject to a patent application which listed you as the sole inventor of the medical device.
Your former partner was supposed to file the application and wanted to be listed as a co-inventor.
When you refused, he withdrew the application, subsequently started his own business and submitted his own application for the patent listing himself as sole-inventor.
In this case, you would bring a claim against the company and its directors and officers (your former partner) for misappropriated technology, and the use of that technology to establish the new company.
Competitor Disputes Finally, you're suing a competitor alleging that a former employee, who is now working for that competitor, has engaged in unauthorized use of confidential and proprietary information.
Also, you're alleging that the employee engaged in other acts of unfair competition.
In this case, you might sue the company and its directors and officers for misappropriation of trade secrets, a violation of the Computer Fraud and Abuse Act, for unlawful access to stored information and for unfair competition.
These are just a few examples of why your company needs directors and officers insurance.
You never know when one of the above situations may strike your company, and you don't want to be on the other end of an expensive claim if you have no defense for the case.
The smart move is to secure a D & O policy so that you, your company, your board of directors, employees, volunteers and everyone else are well-protected in case any such claims are indeed brought against your organization for whatever reason.
What if you don't find the directors and officers insurance you want? I know how hard it can be to try and find the exact risk areas with your business that need coverage, but if you want to find out the real areas of risk and truly get insurance that will minimize the risk to the maximum extent possible.
look here.
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