PROPERTY MANAGER

• A property manager was hired by a commercial building owner to manage the facility.
• An ongoing leak in the building roof caused substantial damage to tenant property.
• The tenants sue the building owner to recover the value of the damaged property,.
• Several tenants legally terminated their lease agreements.

 E&O Claim

• The building owner sues the property manager.
• The allegations are negligence for failing to maintain and to repair the leaks properly and timely.
• Damages sought included lost lease income.

RESOLUTION
The case settled for more than $240,000. The property manager incurred defense costs, which surpassed $60,000.

INSURANCE CLAIM ADJUSTER

• An Insurance company contracted with a claim adjuster to process and pay workers’ compensation claims.
• The adjuster was not properly staffed to handle the volume of incoming claims, and many of them were not handled within the required time frame stated in the local insurance regulations.
• Multiple injured workers filed a class-action lawsuit against the insurance company alleging negligence for failing to properly administer their claims.
• The insurance company quickly settled the workers’ compensation claims, but the administrative costs associated with notifying all potential plaintiffs of the class action exceeded $1 million.

E&O Claim

• The insurance company sued the claim adjuster.
• Allegations are for negligence in processing the claims.
• The lawsuit sought compensatory damages to cover the costs of the class action.

RESOLUTION
The case settled for more than $1.4 million. The defense costs exceeded $175,000.

BOOKKEEPER

• A company hires a bookkeeping firm to handle its accounts.
• During this time the bookkeepers failed to pay the mortgages on the company’s properties, as well as the property taxes, resulting in a loss to the company of more than $600,000.
• The company sued the bookeeping firm for the amount of the loss, alleging negligence.

E&O Claim

• The company sued for negligence and misrepresentation seeking to recover lost amount.
• An investigation revealed that the bookkeepers employees had poor work histories and prior terminations for incompetence.
• The company successfully shows that had the bookkeeping firm conducted thorough background checks on its employees and done periodic audits of the work it performed for its clients, it would have discovered the poor work histories and avoided the mistakes.

RESOLUTION
The case settled for more than $300,000. Defense costs exceeded $100,000.

COLLECTION AGENCY

• In the course of persuading an individual to begin paying off a $4,500 credit card bill, a collection agent made numerous late-night calls to the individual’s home even after being told to stop.
• The collection agent threatened the individual, saying he would never be able to obtain credit again.

E&O Claim

• The individual reported the situation to the police.
• Individual sued the collection agency, alleging violations of the Fair Debt Collection Practices Act.

RESOLUTION
The case settled for more than $7,000. The collection agency’s defense expenses exceeded $5,000.

MANAGEMENT CONSULTANT

• An auto parts distributor hired a management consultant to help the organization with staffing, budgets, and executive decision making.
• The consultant implemented a reorganization strategy that redefined management roles and delegation, initiated spending controls, and used a new staffing model to address the organization’s needs.

E&O Claim

• 18 months after the reorganization, the client alleged that the spending control solution and staffing model had a negative impact on its bottom line when the expense of hiring and training new employees was accounted for.
• The client sued the management consultant for negligence in rendering a flawed solution to its problem, seeking compensatory damages including, but not limited to, lost profits.

RESOLUTION
The case settled for nearly $150,000. Defense costs exceeded $75,000.

MARKETING CONSULTANT

• A marketing consulting firm was hired by a bank to send preapproved credit card applications to two groups.
• One group had an excellent credit history and was to be offered low-interest, high-limit credit. The other group had a poor credit history and was to be offered high-interest, low-limit credit.

 E&O Claim

• The marketing consulting firm sent the “excellent credit” applications to the group with a poor credit history and the response to the mailing was immense.
• The bank sued the marketing consulting firm for negligence over the mailing error.

RESOLUTION
The marketing consulting firm incurred settlement and defense costs of more than $630,000.