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Technology Insurance
  Breach of security.
A telecommunications firm is sued by a customer claiming they were sold a defective system with inadequate security protections. The customer claims the faulty system allowed individuals to access their phone system and, as a result, they incurred fraudulent overseas charges.
Indemnity Paid: $3,450,000

Is Your PR Hurting Your E&O?

How many times have we heard of a corporation being sued not for specific, deliberate, or grievous acts but for what might better be termed “unmet expectations?” Stockholders allege that management forecasts were too rosy and induced them to overpay for their shares. Employees point to the same forecasts as the reason that they failed to diversify their 401(k) retirement plans, thus losing a huge share of their savings when the company’s stock tanked. Soon regulators are involved, directors are assailed, and officer heads are wanted on a platter.

In theory, everyone knows that business entails risk — so why all this furor and finger pointing? In many cases, hefty losses trigger litigation. In other situations, management’s public relations got a bit carried away, and its overly optimistic public proclamations came home to roost.

When preparing information, advertising, press releases, or other communications for public consumption, be sure to consider the outsider’s point of view, “Perception is reality.” And, if the material you’re about to release might create a perception that differs markedly from reality, revisions are in order

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