Below are the the most popular D&O Claims for 2019:
5. Contract Interference:
A commercial roofing contractor was sued by a competitor for diverting a potential contract from their company. Allegations included interfering with a contract and breach of duty. The plaintiff sought lost profits, punitive damages and attorney’s fees.
4. Antitrust Conspiracy:
A competing pharmaceutical company brought charges against the insured (also a pharmaceutical company) for participating in a scheme to cause national and international standard-setting organizations to shut the plaintiff company out of the drug testing market. The company claimed that it was unable to fairly compete. The defense costs (almost $1 Million) would be covered under a Directors & Officers Policy.
3. False Claims and Advertising:
A former employee of a manufacturer alleged that the company knowingly manufactured a defective product that caused injury to users and was eventually recalled. Over $500,000 was incurred to defend the claim.
2. Misrepresentation and Fraud:
An investor sued the company’s chairman and the board alleging that he was misled regarding how his investment money would be used. He was told his money would be used for capital improvements, but was instead used for operational costs. Mediation and defense costs included $300,000 to defend the claim.
1. Breach of Fiduciary Duty:
A printing company’s former directors were sued by its new owners claiming they had disguised the company’s precarious financial position prior to the sale. The insured allegedly participated in transactions causing the overstatement of stockholder equity. Approximately $225,000 was paid to defend the case.