An expert witness and a litigation support services firm purchased miscellaneous professional liability insurance. The litigation support services firm was retained by an attorney to identify an off-road motorcycle expert for a case involving an individual who was injured in an off-road motorcycle accident. The attorney used the expert’s opinion in preparing the case for trial. However, the expert subsequently changed his opinion due to a purported error in evaluating the motorcycle’s brakes. As a result of the expert’s modified opinion, the attorney incurred additional time and expense preparing for the trial. The lawyer subsequently filed suit against both the litigation support firm and the expert, alleging negligent misrepresentation of the expert’s credentials. The case was settled for $23,000.
An auto parts distributor (“the client”) hired a management consultant to evaluate and make recommendations to improve staffing, budgeting and executive decision-making. The consultant subsequently implemented a reorganization strategy. The strategy redefined management’s roles, implemented spending controls and introduced a new staffing model. Eighteen months after the reorganization, the client alleged that the new strategy ultimately resulted in a negative impact on profitability. The client sued the management consultant for negligence, seeking compensatory damages and lost profits.
The insured, a temporary staffing agency, placed a temporary bookkeeper with a small business. Afterward, a local bank teller alerted the business owner when the temporary employee cashed a large company check payable to the temporary employee. The business owner claimed he did not authorize the payment, notified the police and terminated the temporary employee. Upon further investigation, it was discovered that the temporary employee had forged checks in excess of $125,000 and was previously convicted of a similar crime. The business owner alleged the insured either failed to conduct or conducted an inadequate background check. He also claimed the temporary employee’s references and credentials were falsified or exaggerated.
A personnel agency filled a position for a mid-level sales manager. After one year on the job and a decline in sales, the client company fired the manager and sued the personnel agency. The company alleged the sales manager was a poor performer who wasn’t properly screened by the agency. The claim settled for over $75,000.