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I, as a person, am being sued for unfair competition, with allegations that I stoled customer information, will insurance cover?

North Hollywood, CA |

My previous employer began litigation against me for allegedly stealing confidential consumer information and competing against them by approaching these customers. I hired an attorney and based on his recommendations and the fact that "witnesses" for the alleged fraudulent activity were coming up left and right, we settled the case (originally about 250k), settled for 50k in monthly payments. I have business insurance, will this cover it?

Attorney Answers 3


  1. It depends on the specific terms and provisions of the policy as coverage is defined. Many but not all insurance contracts specifically exclude coverage for willful unlawful acts.

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  2. As Ms. Mccall has noted, intentional torts are rarely covered by insurance, and that fact that you appear to have settled the matter without involving your insurance company and giving them an opportunity to defend you, may also preclude coverage under your policy. Nevertheless, you can get your answer by having your policy reviewed in its entirety by a local attorney, who can advise you of your rights, options and responsibilities, and perhaps certain related procedures that will be most favorable to you now and/or in the future. You can also simply ask your insurer. Good luck!

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  3. you can tender it to the insurance carrier and see. However, this should have been done at the beginning of the case.