Employment Practices Liability

Rough NotesVol. 148 Nbr. 6, June 2005

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Summary


As the result of a recent US Supreme Court ruling, any worker over 40 years old can allege age discrimination even if the employer never intended to harm the employee. The fact is that even though this looks like a new advantage, anyone filing will probably have a difficult time winning the case. Okay, that means that the losses will not increase. What about the duty to defend? With most limits inside the primary, defense costs could erode the policy limits. Who is the winner? When taking a look at pricing, risk selection and other market conditions you must consider the geographical area, type of operation (nonprofit vs. public entity), and number of employees of the client.

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Employment Practices Liability

As the result of a recent U.S. Supreme Court ruling, any worker over 40 years old can allege age discrimination even if the employer never intended to harm the employee. The fact is that even though this looks like a new advantage, anyone filing will probably have a difficult time winning the case. Okay, that means that the losses will not increase. What about the duty to defend? With most limits inside the primary, defense costs could erode the policy limits. Who is the winner?

When taking a look at pricing, risk selection and other market conditions you must consider the geographical area, type of operation (nonprofit vs. public entity), and number of employees of the client.

"Pricing on EPL policies is holding steady, with companies with smaller numbers of employees (approximately 750 or fewer) getting better rates than larger risks," according to Richard G. Clarke, CIC, CPCU, RPLU, senior vice president of J. Smith Lanier & Co. and a member of the EPL subcommittee for RiskProNet International, Inc.

Clarke said that although underwriters have been competing heavily for nonpublic D&O risks with EPL included, public entity D&O risks are not nearly as desirable to them and EPL is virtually never included in the same policy, but is underwritten separately.

According to Michael J. Maloney, senior vice president of Global EPL at Chubb Specialty Ins...

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