Employment Practices Liability Insurance (EPLI) covers employers for a broad range of employment-related claims, such as discrimination, wrongful termination and disciplinary actions, harassment and retaliation. In the evolving landscape of employment law, EPLI can be a valuable risk transfer solution for employers. EPLI differs significantly from the better known, and more often carried, commercial general liability insurance and employers may be not be aware of the coverage afforded under EPLI policies. SDV works with our clients to identify potential gaps in their existing coverage, help formulate solutions and secure coverage that meets their needs.
EPLI policies are written on a claims-made basis and provide coverage only if a claim is made and reported during the policy period, making the definition of a "claim" under the policy important. When a claim is made is also important for determining coverage, as most EPLI policies have extended reporting period and/or retroactive date provisions. An extended reporting period provision extends the time in which a claim can be made and/or reported as long as the wrongful act was committed during the policy period. A retroactive date provision eliminates coverage for wrongful acts that occurred before the retroactive date, even if the related claim is made during the policy period. "Shrinking limits" provisions reduce the amount available to pay a claim by the amount of the legal fees paid to defend the claim, and many EPLI policies provide there is no duty to defend at all unless and until the deductible or retention is exhausted.
In addition to these common provisions, there are also some exclusions to be aware of:
- Prior acts
- Bodily injury to employees
- Claims under federal statutes such as ERISA, NLRA and OSHA, as well as related state statutes
- Claims made pursuant to employment contracts
- Claims where the insured committed fraud or profited from the wrongful act
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