Secured Full Defense From D & O Insurer For IP/Trade Secret Theft Claim Despite Previous Denial

Our policyholder client was sued claiming an important new product it recently launched was based on trade secrets belonging to another company.  The plaintiff-claimant alleged that one of its former employees had been hired by our client and that the idea and design of our client’s new product was a trade secret developed during his employment with the claimant.  The claim was tendered for a defense to our client’s Directors and Officers’ liability carrier, but was denied on various grounds including that trade secret theft was excluded.  Within a month of being retained, we developed a strong argument for coverage and the D & O carrier reversed its position and agreed to provide a full defense for both the claim against the company and the employee.