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Business Insurance

Employment Practices Liability

Wage and Hour Defense Coverage

An assertion by an employee-plaintiff that his or her employer has failed to pay overtime wages owed to the employee. Within the past several years, a number of high-profile, high-dollar wage and hour claims have been filed on a class action basis, a fact that has vastly increased the dollar amount payable under such lawsuits. Given the magnitude of this exposure, most employment practices liability insurance (EPLI) policies specifically exclude coverage for wage and hour claims.

Employment Practices Liability Insurance – 1st Party  

Claims involving wrongful acts which arise from the employment process. The most frequent types of claims covered under such policies include wrongful termination, discrimination, sexual harassment, and retaliation. In addition, the policies cover claims from a variety of other types of inappropriate workplace conduct, including (but not limited to) employment-related: defamation, invasion of privacy, failure to promote, deprivation of a career opportunity, and negligent evaluation. The policies cover directors and officers, management personnel, and employees as insureds.

Employment Practices Liability Insurance – 3rd Party  

A separate insuring agreement contained within employment practices liability insurance (EPLI) policies that cover liability claims brought by nonemployees (typically, customers, clients, and vendors) against employees of the insured organization. Third-party employment practices liability coverage is needed because coverage for claims by nonemployees is not provided under commercial general liability (CGL) policies. This is because CGL policies exclude coverage for harassment and discrimination—the two causes of action most likely to be alleged in claims by third parties.