| EPLI - How to Get the Best Coverage |
June/2009 |
Greetings!
Employers today are facing significant liability when making employment decisions. It is critical when working with your insurance provider on this coverage that you carefully review the application for insurance and answer all questions as accurately as possible. Not doing so could result in serious problems later, even denial of coverage for a claim. |
| Insurance Coverage |
 Expiring Insurance Coverage
It is important to understand whether your current coverage is on a claims-made or occurrence basis. Does the expiring policy currently have a deductible or an SIR (Self Insured Retention)? If your coverage is currently written with an SIR, does the coverage form provide duty to defend language? Is defense written within or outside the limit? Does it provide coverage for third-party claims? Does it provide coverage for wage and hour defense? Are there additional coverages added by endorsement or important exclusions? |
| Changes in Operations |
| Changes in Your Operations During the prior 12 Month Period
Given the current economic conditions, many employers have seen significant reductions in staffing. It is important to clarify how these reductions were affected. Were there lay-offs? Was reduction a result of attrition? How many employees with annual salaries exceeding $100,000 were terminated? Inaccurately addressing these questions could impact pricing and could ultimately affect any coverage placed. |
| Anticipated Changes |
| Anticipated Changes in the Coming 12 Month Period
Do you anticipate lay-offs or sales or closures of existing operations? Is expansion a possibility? Might there be other material changes in your operations? |
| Claims |
 Prior Claims History
Many believe that charges filed with the EEOC or other state agency that have not led to litigation are not claims. This is often not correct. While the charges may not proceed to litigation, these should in fact be disclosed on the application. Failure to disclose may jeopardize coverage placed. Any claims whether filed only with the EEOC or state agency or litigated should be explained. Who was the employee or third party? What was the employee's position with the company? What was the allegation(s)? How was the case settled? If not settled, what is the status of the case? Have your made any corrective actions to avoid this type of claim in the future? The larger the claim, the more important it is to understand the issues involved and the corrective actions made. The more claims you have had, the more important it is to understand the nature of the claims and the corrective actions made. Failure to provide this information will almost always result in higher premiums, deductibles/retentions, declination or worse, denial of coverage after a policy is in place. |
