D&O - EPLI - What the Frick?

insurance1822

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Is EPLI only available as an add on to D&O policies?

Can it be added to GL?

GL always excludes EPLI right?

Don't BOP's typically provide some baseline amount of coverage here?
 
Is EPLI only available as an add on to D&O policies?

Can it be added to GL?

GL always excludes EPLI right?

Don't BOP's typically provide some baseline amount of coverage here?

No you can write a monoline epli. Try Phly or USLI.

Some BOPS have a sublimit for EPLI.

Yes, all GL and BOPs exclude epli.

No, most bops don't include epli policy. Some of the better quality policies offer it or allow you to add it on.
 
progressive writes it stand alone at least here in Minnesota they do.

most of my carriers offer it as an add on.
 
You're correct in stating that EPL is often added to D&O policies as an optional extension or insuring clause. It is also commonly included with most Management Liability products, designed specifically for the SME market.

Bigger companies with larger EPL exposures, on the other hand, may look to establish a stand-alone policy. This is usually for the simple reason that they do not want to contaminate their D&O policy with EPL claims made against the entity.

Generally speaking, EPL claims occur with more frequency and the last thing anyone wants is for the D&O limit to be eroded battling EPL claims. By separating the two coverages, employment-related claims are quarantined away from the D&O policy, which is primarily intended for the protection of individuals.

You'll probably find that most insurers offering financial lines products in one way or another, such as D&O and ML, will also have a stand-alone EPL product. The minimum premiums associated with stand-alone policies are generally higher and the coverage offered slightly broader.

To answer your general liability question. No, I would say it's quite unusual to see EPL added to GL. GL is intended to protect an insured against claims by third parties claiming personal injury and property damage. As you rightly said, employees are not third parties and therefore, it would be against the intent of the policy to cover claims made by them.

In any case, it's unusual for an EPL policy to cover bodily injury or property damage unless it's somehow related to mental anguish and workplace bullying. But what if an employee is actually hurt at work? That's what Workers Compensation is for.
 
majority of standard carriers have an EPLI limit outside of the GL limit.

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that being said majority of carriers wont write DO coverage. so there is a market for stand alone DO
 
just curious... do you think there's a market for anyone wanting just stand alone D&O or stand alone EPLI policies?

I can sell both as stand alone policies but I've never really looked into it much.

Of course there are markets for stand-alone D&O and EPL, it just depends on who your clients are.

For most small and medium businesses, a Management Liability policy is really going to be your best bet. Over the last 5 or 10 years, ML has really come a long way and is a great product for those businesses employing staff and where the owner is beginning to delegate responsibility. For those who haven't had a lot of experience with this class, ML typically includes the following coverages:
  • Executive liability: standard D&O coverage for managers
  • Corporate liability: broad civil liability coverage for claims made against the entity
  • Employment practices liability: entity coverage for employment-related claims
  • Trustee liability: entity coverage for claims arising from the management of retirement, superannuation or 401k schemes
  • Crime: coverage for crime committed against the entity, such as fraud and misappropriation
  • Statutory liability: entity coverage for pecuniary penalties and possibly fines, resulting from breaches in legislation
  • Taxation investigation: coverage for investigations undertaken by taxation authorities

ML is much more affordable that traditional stand-alone D&O and EPL policies and offers clients much broader coverage. That being said, if your clients are turning over tens of millions of dollars, Management Liability may not be an option available to them. It really depends on an insurer's own appetite but after about $50m in annual revenue, you'll probably be looking at stand-alone coverages.

There are a couple of other reasons why a client might opt for stand-alone coverages:
  1. Industry: a client's business may be deemed too risky for ML (e.g. financial services).
  2. Claims contamination: ML often has combined limits, which means that a claim under the EPL section will reduce the limit available for defending executives under the D&O section. This isn't aways the case, however, as some may allow you to elect "seperate pillars" for each section of coverage. If a company is concerned about entity claims eroding D&O coverage, they may also choose to insure EPL separately.
 
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