Posts Tagged ‘Employment Practices Liability’

5 reasons your private company should consider D&O insurance

5_D&OPrivate company leaders should not make the mistake in thinking they are protected from personal lawsuits simply because their company is not publicly traded. According to Chubb’s Private Company Risk Survey, 27% of private companies experienced a D&O lawsuit over the previous decade, compared to 33% of public companies. And in 2013, the cost of a lawsuit against a director or officer of a private company was an average of nearly $700,000. Despite such risks as costly lawsuits, government fines, and more, a large percentage of company leaders are not taking steps to protect themselves. So, before you write it off entirely, keep these 5 factors in mind.

  1. The threat of lawsuits
    Private companies are statistically less likely to be sued in comparison to public companies, but a few instances stand out:

    • Creditor suits. If your private company were to go bankrupt, there is a chance creditors could sue. D&O insurance would protect the personal assets of company leadership from these creditor lawsuits.

    Read more…

Employer marijuana policies go to court over conflicting federal and state laws

September 9, 2014 Leave a comment

gavel_potPress reports highlight new conflicts over the inconsistencies between federal and state laws over marijuana usage by employees. Federal law requires government contractors to have drug-free policies that apply to federally controlled substances. In Colorado, the application of that policy via Dish Network’s employment practice led to the firing of Brandon Coats, after a drug test showed him to be a medical marijuana user. Coats, having lost his case at two levels is now arguing his case before the Colorado Supreme Court.

Coats maintains that his marijuana use is essential medical therapy. He also says that his usage is during off-work hours, so any impairment caused by marijuana is not evident in his work. He compares marijuana usage to recreational liquor usage. Read more…

Market Basket case: Potential coverage exclusions to consider

August 14, 2014 Leave a comment

The Demoulas/Market Basket saga has dominated the news here in New England over the past month. From a risk management perspective, the developments of the case should signal risk managers to review their Management Liability policies and insurance program, especially in the following areas:

Crisis Management coverage – Some insurers offer a sublimit of coverage to assist companies that must announce adverse news relating to business operations. Typically, insurers offer a select group of public relations firms to assist the insured with press releases and interviews. The expense sublimit can vary between $25,000 to $75,000 by Insurer. Read more…

Mounting claims expenses bring changes to MLI policies

ProfessionalLiabilityIn the last two years, Management Liability Insurers have shifted their underwriting guidelines for privately-held organizations by  increasing rates, retention levels and a reduction in coverage and total limits offered. Wage and hour defense cost sub-limits have also been reduced or removed entirely, and some carriers are not renewing policies based on industry, asset size of risk, financial condition and loss experience.

While there are still Management Liability Insurers willing to write these accounts, the marketplace appears to be reaching a point where this capacity will no longer be utilized to offer terms that the industry has become accustomed to seeing in recent years.

Why is this happening?
Based on conversations with several Management Liability Insurers, there are several reasons:  Read more…

Duty to Defend/Non Duty to Defend – Do you understand the difference?

November 25, 2013 Leave a comment

smallclaimspixInsurance professionals frequently encounter “duty to defend” clauses in general liability policies and while handling third-party claims for clients.  However, insurers and policyholders are often less-familiar with the language surrounding “non duty to defend” provisions, especially those found in Director’s and Officer’s Liability (D&O) and Employment Practices Liability (EPL) policies.

The comparisons below describe the differences between the two clauses, and highlight the rights and duties of the insured and insurer in each type of case.

Duty to Defend: in a duty to defend policy, the insurer has the right and duty to defend a claim.  Read more…

Recent EEOC cases and the importance of employee background checks

October 24, 2013 Leave a comment

backgroundcheckIt’s a good time for employers to review hiring protocols and their use of background checks. Last summer, the Equal Employment Opportunity Commission (“EEOC”) filed a series of class action lawsuits against large employers for violating Title VII of the Civil Rights Act based on unlawful use of background checks. Among the EEOC’s chief complaints in two of the cases were allegations that employers’ background check policies had an adverse impact on the basis of race.

According to the EEOC’s April 2012 revised Guidance, employers must perform an individualized assessment and engage in dialogue with an individual with a criminal background before disqualifying him or her from employment. In addition, employers Read more…

Latest EEOC’s report highlights rise in systemic suit filings

February 19, 2013 Leave a comment

EEOC2The U.S. Equal Employment Opportunity Commission (EEOC) recently published its 2012 Performance and Accountability Report. The Report foreshadows the EEOC’s strategic objectives for 2013. The EEEOC’s proposed strategic plan has established three objectives: (1) combating employment discrimination through strategic law enforcement; (2) preventing employment discrimination through education and outreach; and (3) delivering excellent and consistent service through a skilled and diverse workforce and effective systems.

The Report recognizes the EEOC’s record recovery of $365.4 million through the administrative process in 2012, an increase of $700,000 from 2011. Read more…