Secured Full Defense of IP/Trade Secret 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.