Employment Practices Liability Insurance

Page 4 of 5

EPLI coverage issues Who is an "employee"? The broad definition of "employee" is anyone over whom the insured has the right of any control, which includes temporary and leased employees. Broad definitions of "perils" The following are included in the broad definitions of "perils": Bodily injury, mental injury, mental shock, or emotional distress--all as a consequence of the defined "wrongful act" Consequential loss (e.g., spouse) Hostile environment Retaliation Invasion of privacy Misrepresentation Exclusions to modify or delete Consider modifying or deleting these exclusions: Bodily injury or assault or battery Intentional acts Punitive damage exclusion Delete any whistleblower exclusions. The Worker Adjustment and Retaining Notification (WARN) Act exclusion should be modified if the insured has made a reasonable attempt to comply with the law. Other issues to consider Be mindful of contractually assumed liability exclusion. Most often, it is part of the policy. Another issue to consider is breach of implied contract. An example of this would be the verbal promise of "Do a good job and you have a job forever" followed by a lay off. Trigger of coverage What will trigger the Employment Practices Liability coverage? Remember this important information: Oral complaint Written complaint - employee Written complaint - legal representative of employee Right-to-sue letter issued from the state or EEOC (describe what this will look like to your insured!!!) Summons and complaint Policy conditions Policy conditions should include: Duty to defend Payment on behalf of the insured Notice and knowledge of claim (particularly important) Does the insurance policy define the person or entity whose knowledge then invokes the obligation to notify the insurance company? This is something that needs to be confirmed. Deductibles Does the deductible apply to damages only, or to defense costs as well? Since most Employment Practices Liability Insurance policies include defense within the limit, it most likely does apply. Verify that the insurance company does not require pre-payment of the deductible. What to look for in the insurance company Here are some criteria for selecting an insurance company for Employment Practices Liability Insurance: Length of time writing this coverage Legal counsel or consultants available Loss control services available Willingness to tailor the policy to the needs of the insured Available limits of insurance Trigger of coverage matches with the insured's ability to comply

Next Page >

© Copyright CEfreedom.com and Insurance Skills Center. All Rights Reserved.

Not only are policy forms, clauses, rules and court decisions constantly changing, but forms vary from company to company and state to state. This material is intended as a general guideline and might not apply to a specific situation. The authors, LunchTimeCE, Inc., CEfreedom, and Insurance Skills Center, and any organization for whom this course is administered will have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this course.