 |
 |
 |
|
EPLI innovators Employment-related risk mitigation is the focus for Professional Indemnity Agency By Phil Zinkewicz Despite its relatively brief history, employment practices liability insurance (EPLI) coverage is in great demand by employers large and small in the United States, and insurers are not hesitating in trying to satisfy that demand. Newspaper headlines are dramatic as they report on age discrimination lawsuits, sexual harassment lawsuits, wrongful termination lawsuits, and the list goes on. As the trend continues, employers are naturally concerned about costly litigation. Insurance is only one answer, however. Proper risk management techniques to mitigate such lawsuits are also essential, and the insurers that offer both sophisticated coverages as well as carefully designed risk management programs are the ones that will dominate the EPLI arena. Richard V. Rupp, senior vice president of Professional Indemnity Agency (PIA), a managing general agency, believes that his firm has tailored an EPLI program, primarily geared to small, privately held corporations and franchise groups, that addresses both insurance and risk management. Rupp is manager of PIA’s San Francisco office and is the firm’s employment practices liability insurance product manager. Since joining Professional Indemnity in February of 1999, Rupp has grown the EPLI business from $1.2 million in annual premium to more than $31 million in 2005. To date, more than $125 million in premium has been written in the program. He is a nationally recognized author and lecturer on insurance and risk management. “Our EPLI policy form, with its broad coverage, is regarded as one of the best in the marketplace,” says Rupp. “The PIA Open Market Program is designed for firms with up to 750 employees,” he says. “Limits up to $2 million are available, and deductibles are as low as $2,500, and a minimum premium of $850 applies. The program is written through Houston Casualty Company on a nonadmitted basis and through U.S. Specialty Insurance Company on an admitted basis. Both those carriers are rated A+ by A.M. Best Co. and AA by Standard & Poor’s.” Rupp says that among the classes of business that PIA will not underwrite are casinos, card clubs, child care centers, educational institutions, real estate and property management, and religious organizations, among other exposures. “Our target markets are affinity groups with a recognized association sponsor, such as the Society of California Certified Public Accountants, or a franchise group with a recognized franchiser such as McDonald’s, General Motors, and Marriott International that has at least 25 potential policyholders who will generate at least $25,000 in annual premium,” says Rupp. “We currently write 98 franchise restaurant programs, 73 franchise hotel and motel programs and 16 other affinity/franchise programs. They include: 7-Eleven stores, Burger Kings, Church’s Chicken restaurants, Courtyard Inns & Suites, Doubletree Hotel, Hampton Inns, International House of Pancakes (IHOP), KFCs, McDonald’s, Pizza Hut restaurants, Taco Bell restaurants, and Texaco Stations and mini-marts.” Among the highlights of PIA’s EPLI program, according to Rupp, are: coverage for discrimination, harass-ment, inappropriate employment conduct, libel, slander, defamation of character, and invasion of privacy; broad definition of “named insured” (which includes the entity, current and former directors, officers and their spouses, partners, managers, supervisors, employees, temporary employees, leased workers, and independent contractors); coverage for past and future employees; full prior acts coverage; duty to defend; insured’s right to approve claims settlement; modified “hammer clause”; no co-payment; punitive damages are covered where permitted by law; and no intentional acts, assault & battery or bodily harm exclusions. “As to punitive damages, some states do not consider these insurable. But where they are insurable, there should not be punitive damages exclusions. Many employment practices awards have included sizeable punitive damage amounts. Our policy automatically covers these amounts in the states where the law allows punitive damages to be insured. Also, our policy does not have an intentional acts exclusion. There is no question that many employment-related decisions are intentional acts. But, if your EPLI policy excludes intentional acts, it leaves the door open for an insurer to deny coverage. In the event of a claim, policyholders have the right to select a local labor/employment law firm to represent them from a panel of more than 120 of the best U.S. firms specializing in business employment law,” says Rupp. But coverages aside, Rupp says that PIA is extremely proud of the risk management services it offers. Through its relationship with YourHRdepartment, a firm that specializes in human resources, Professional Indemnity offers its HR Pilot EPLI Risk Management Program, which includes: • HR Pilot Hot Line—This hot line will be answered by an HR professional who will respond to any type of employee-related question that involves a coverage provided by the PIA EPLI policy. There is no limit to the number or length of such calls. • Legal Advice from a Nationally Recognized Employment Law Firm—If, after calling the Hot Line, a policyholder wishes to speak to an attorney, PIA has arranged with its Panel Counsel to review necessary information and provide legal advice to the policyholder at significantly discounted rates. Panel Counsel has agreed to provide the first 30 minutes of their service at no cost. • HR Employee Complaint Line—The employee complaint line is designed to meet the court-inspired requirement that employees be able to report a complaint to their employer. Often, for the small to mid-sized employer, this is difficult to accomplish. The toll-free employee complaint line provides a neutral third party that employees may contact to report complaints of harassment or discrimination. • HR Pilot Sexual Harassment Prevention Training—The sexual harassment prevention training is designed to educate the policyholder workforce and reduce the likelihood of costly litigation. Quoting from Michael J. Lotito, partner in the employment law firm of Jackson Lewis LLP: “The law is clear for most, if not all, employers. There is a mandate to provide training for supervisors, and a strong incentive to train all employees, as well.” The HR Pilot Program includes Internet employee training (at no additional cost) and several regional training programs. In addition, Rupp says, an HR Pilot newsletter is delivered each month by e-mail, along with notification about important changes to employment standards in the policyholder’s state and related changes to the HR Pilot Web site. Rupp says these HR Pilot programs assist employers in mitigating lawsuits in several different ways. “First, they provide the employer with the opportunity to talk directly to employee practices experts on a regular basis,” says Rupp. “When an employee practices question arises, the employer can tap the expertise of human resources experts. If the question develops into a potential legal situation, that assistance is available. And, as for the employee hot line, that serves two purposes. First, it lets the employee know that his or her employer is ready to provide a neutral third party when a complaint arises. Second, the neutral third party can resolve a situation when it occurs and prevent a lawsuit.” * For more information: |
|
||||||||||||||||
| |||||||||||||||||
