Section 2 - Employment Practices Flashcards
3 Primary Source for EPL Claims
Violation of Statutes
- Civil Rights Act
- Age Discrimination in Employment Act 1967
Workplace Torts
- Civil wrong that does not involve breach of contract. Intentional (ex: negligence) or unintentional (ex: Defamation)
Breach of Contract
- Written contract or implied
8 Types of Workplace Torts
WWW BLINN
- Wrongful or negligent evaluations, criticism, demotions, discipline
- Wrongful deprivation of a career opportunity
- Wrongful Detention or imprisonment
- Bullying, humiliation, infliction of emotional distress
- Libel, slander, defamation of character
- Invasion of privacy
- Negligent hiring practices
- Negligent supervision
Wrongful Act Definition
Word used to describe the types of claims covered by the policy
2 Types of Harassment
Quid pro quo
- Submission to or rejection of unwelcome sexual conduct by an individual is used as the basis of employment decisions
Hostile Environment
- Unwelcome sexual conduct unreasonably interferes with an individuals job performance or creates an intimidating, hostile or offensive work environment
2 Types of Wrongful Termination
Actual Termination
- Employee involuntarily terminated
Constructive Termination
- Making the working conditions unbearable with the intention that the employee quits on their own
Who is an Insured EPLI (6)
SPLEEN
- Spouses of individual named insureds (many assets jointly filed, but not for individual acts of the spouse)
- Partners and members of partnerships or joint ventures
- LLC Members and managers
- Executive officers and directors of other orgs (corps, etc)
- Employees and former employees
- Newly acquired organizations subject to limitations
Website Accessibility Suits
Lawsuits regarding ADA were visually impaired people are suing websites that don’t meet ADA standards. Alleging they are being discriminated against
Third Party Suits - For Who and what covered
Depends on form, but some are anyone that the business interacts with that isn’t an employee. Can pay for suits from alleged discrimination from vendors / clients / etc.
EPLI Exclusions (14)
3WB 2PVC AS
- WC and Similar Laws
- Wage and Hour Defense Costs (Sometimes sublimit)
- Wage and Hour Related Violations (excludes misclassifying employees, not paying OT and miscalculating wages owed)
- Bodily Injury and Property Damage
- Breach of Written Employment Contract (Sometimes will defend but not pay damages)
- BioMetric Identifiers
- Prior or Pending Litigation (PPL is when suit starts. Retroactive is when occurrence happened)
- Prior Notice (Notice of claim already given under a prior policy)
- Violation of Certain Laws (OSHA, WARN, ERISA, National Labor Relations Act)
- Violation of Employee Privacy (Better for cyber)
- Criminal / Fraudulent / Malicious Acts
- Contractual Liability (sometimes included in GL and Auto)
- ADA Violations (don’t pay for bringing building up to standard of the Act. Can defend though for claims of discrimination)
- Strikes and Lockouts
Duty to Defend (1) vs. Non Duty to Defend (2)
Duty to Defend
- Insurer has right and duty to defend the insured unless not covered on policy
Non-duty to Defend
- For insureds that want greater control over the defense of claims and
- Insurer usually retains right to participate and needs to consent to settlement
Payment of Defenses - 3 Relations of Defense costs to Limits
Defense within the Limit
- 2 issues: If limit is reached, defense ends. Defense costs reduce limit for others items
Defense in Addition to Limit
- Sometimes have their own separate limit for defense or it’s unlimited and outside of the other limit
Defense subject to deductible or retention
- Include deductible for defense costs and settlement costs so insured motivated to settle
Consent to Settle - Hammer Clause and Soft Hammer Clause
Insurer needs insured’s consent to settle. 2 options for if insured doesn’t want to settle
Hammer Clause: Insured pays out of pocket for anything higher than the proposed settlement from the insurer
Soft Hammer Clause: Insurer pays a percentage of the amount over the originally suggested settlement (80%) and insured covers rest (20%)
Incentive to Settle
Insured can reduce SIR or deductible if insured agrees to settle on their suggestion
Notice of Claim
- What is a claim? (ISO Definition and why important)
- Duties in event of claim? (2)
- Need to know definition of claim in order to know what needs to be reported. ISO Definition: suit or demand made by or for a current, former or prospective “employee” for damages because of an alleged “wrongful Act”
Duties in Event of Claim
- As soon as practicable it must be reported (broad language)
- Some give 30 day grace after policy expires unless it is replaced by another policy
Incident Reporting - 2 Types
Right to Report
- Insured has right to report incidents that may result in a claim
Duty to Report
- Insured has right and duty to report incidents that likely could give rise to a claim
