Professional Documents
Culture Documents
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Retaliation
Expanded Definitions of Wrongful Employment Act generally all revolve around these four perils Violations of FLSA, FMLA and USERRA and similar federal, state and local statutes
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any entity which, on or before the date of the inception of this Policy, is more than 50% owned by the Parent Organization, either directly or indirectly through one or more of its Subsidiaries Automatic coverage for acquisitions up to 25% of employee count at policy inception Affiliates? Joint ventures? Leased employees Independent contractors/1099 employees
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Extended Reporting Period (ERP): 1-2-3 year options built in Notice of Claim or Circumstance as soon as practicable but no later than 60 days after expiration of the policy Non-cancelable by the insurer, except for non-payment of premium Three year installment option available on most accounts
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Bodily injury/property damage Coverage carve back for mental anguish, emotional distress, libel, slander, defamation,
humiliation and invasion of privacy resulting from a Wrongful Employment Act
Fraud or dishonesty except for vicarious liability of the entity ERISA-related claims except for Retaliation Statutory obligations except for Retaliation
(e.g. workers compensation, disability benefits, unemployment)
Strikes/lockouts/unionization except for Retaliation Prior and pending litigation Claims noticed to prior carrier Modification of real property (ADA accessibility) Defense Costs coverage only Breach of Express Employment Contract Defense Costs coverage only
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An employer is more likely to have an EPL Claim than a General Liability or Property loss. Fewer than 25% of employers currently carry EPL. There are over 25 million small businesses in the US with under 500 employees and not publicly traded (Source: www.sba.gov )
Three out of five employers are sued by former employees every year (Source: Society of Human Resource Managers)
General Liability policies do not cover EPL or can be endorsed with watered-down coverage at low limits.
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MYTHS OF EPL
MYTH #1
EPL was created by the Insurance Companies to create new premium sources.
MYTH #2
MYTH #3
MYTH #4
MYTH #5
EPL premiums are too high and the underwriting process too time consuming.
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229 days
(longer if there is a delay in responding to information
requests) to get a determination.
Think of the defense costs as well as the cost of the time of the people involved!!
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a jury trial punitive damages damages for mental anguish and emotional distress
In 1992, the first stand-alone EPL policies hit the marketplace.
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Over 40% of EPL claims are brought against private employers with under 100 employees (Source: SHRM) Most litigious states: CA, NJ, IL, TX, FL and NY. (Source: Insurance Journal) Employment practices liability claims represent 30% of all civil litigation in the United States today. (Source: Bickmore Risk Services) 550 EPL lawsuits are filed every day (Source: Insurance Journal) 67% of discrimination cases settled by jury verdict are in the plaintiffs favor The average cost to defend an EPL claim is $150,000. (Source: Insurance Journal) The median jury award is $250,000 plus 19% of all cases had punitive damages assessed.
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OMMITTED
DIFFERENCE
MAKING
TO
Sample HR Policies Anti-Discrimination/Anti-Harassment Electronic Communications Employment-At-Will HR News Center and recent employment law changes HR Resource Manual and Employment Forms
EPL is just one part of a total risk management plan for every employer.
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