While we recently wrapped up some articles on Cyber Liability, and how it relates to Risk Assessment in Business Continuity Planning, I want to take the next few articles and touch on some of the most common coverage questions we address when assessing risk. These articles wont cover everything, but they will touch on some of the lesser-known coverages that we encounter
The first two coverages that we have historically seen a lot of issues around, are Employment Benefit Liability Insurance (EBLI), and Employment Practice Liability Insurance (EPLI). While these two coverages seem the same, they actually cover two completely different exposures.
Employee Benefits Liability Insurance – This protects employers from claims arising out of the administration of benefits to employees. The key question here is what are considered employee benefits. For example, one item that is often brough up in the context of EBLI, is whether Over Time is considered a benefit. Depending on the context, it can in fact be considered a benefit. However, the most common benefits that people think about when discussing EBLI are things like Health Insurance, Disability Benefits, Retirements plans etc….
Some Key items to consider when looking at EBLI coverage:
1. Determine your exposure. Obviously, the more benefits you provide and the more employees you have the greater your exposure. That’s not to say, you cant have an issue with just one employee.
2. What coverage limits do you need, and what is the cost associated with it?
3. What are the steps you currently have in place to prevent something unforeseen from happening?
4. What are the deductible options that your carrier provides?
5. If you have an umbrella, does the umbrella provide any type of additional coverage?
6. What is excluded if anything? After all, there’s never a problem with insurance until you go to file a claim.
Employment Practice Liability Insurance – This protects employers from claims related to employment practices. Things such as discrimination, wrongful termination, harassment, retaliation claims, Employment contract disputes, Defamation, failure to enforce or provide policies.
Due to the nature of this coverage, when a claim occurs, it usually has legal representation associated with it. In addition, the claims amount is usually for large sums, due to the type of claims this coverage addresses.
Again, this coverage does not preclude an employer from having the following items in place when employing people.
1. Strong Employee Handbook
2. Safety Manual
3. Education – Regular meetings with team members addressing potential issues, and what to do if they arise.
4. Notifying the proper personnel when something has occurred.
5. Documentation
6. Checklist and sign off sheets
What’s equally as important when discussing EPLI is, what EPLI does not cover.
1. Workers Compensation
2. Breach of Contract
3. Issues related to EBLI items
4. Criminal Acts
Its also important to note, that these types of claims tend to spike when economies face hard economic times. When companies down size, or are forced to lay staff off, this is when you see the number of claims for these coverages rise. This is why it is so important to have proper procedures in place, when considering these coverages.
If you have questions about any of these coverages please let us know.
