Employment Practices Liability

Employment Practices Liability (EPL)

Employment Practices Liability coverage protects the insured against damages for events relating to their workforce, including but not limited to; wrongful termination, harassment, discrimination, defamation and unfair hiring/firing practices. Coverage also provides for defense costs associated with responding to employment related lawsuits.

In addition to the increasing legal obligations employers are facing while managing their workforces, settlements can have a significant impact on the company's financial stability, with the cost to defend against employment suits, regardless of outcome, being high. The harm that can be caused to a company's reputation can be irreparable!

Is adding EPL to your insured's CGL in their best interest? Four reasons why it might not be:

- When included under the CGL or D&O, some insurers provide a sublimit or will share limits
- Coverage is not always as broad with respect to insureds, wrongful acts, third parties...
- CGL insurer may not be as experienced in claims handling
- Many insurers offer little, if any, management services
- Any EPL claim experience developed could impact availability of coverage / pricing of the balance of the
account

The cost of including it under the CGL or D&O might be lower, BUT THERE IS A REASON!

Highlights of a stand alone policy:
	Broad definition of employees to include leased or contracted individuals, independent contractors and applicants for employment
	Full retaliation coverage
	No exclusions for reductions in force
	Loss specifically includes front pay and back pay
	No full wage / hour exclusion
	No intentional acts exclusion

Can your clients afford NOT to have EPL?
Consider this real case:

An executive of a manufacturing company files suit against the company for wrongful termination and intentional infliction of emotional distress. The plaintiff, a former Chief Operating Officer, makes statements that the company improperly failed to pay employee overtime and terminated the employee for filing a complaint. The plaintiff alleges that although the company advised him that his termination was due to performance problems, he was actually terminated in retaliation for his honest statements he made in connection with a fellow employee's termination. Total DEFENSE COSTS and SETTLEMENT exceeded $750,000!


Tonya C. Hollederer, RPLU, ASLI Vice President / Senior Broker thollederer@RussellBond.com Cell Ph: (716) 725-7451	Jackie Oddo Broker joddo@RussellBond.com Cell Ph: (716) 228-3320

"Even if you win the case,
the cost to defend can be substantial!"

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