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Employment Practices Liability (EPL) Coverage

Driven by an explosion of employment related lawsuits, employment practices liability (EPL) coverage is a new and growing line. Recent legislative and legal changes have provided significant incentives for employees to file employment-related claims, and employers now possess an increased awareness of employment exposures and are receptive to coverage recommendations that offer greater risk protection.

Over the last several years, litigation related to employee complaints alleging discrimination, harassment and wrongful termination has increased dramatically. These suits can be costly-hundreds of thousands, even millions of dollars. Even an employment related claim without merit can cost an employer $10,000 - $20,000 to defend.

EPL coverage typically provides coverage for employment claims from the following areas:

EPL coverage is typically written on a claims-made basis.

The exposures presented by employers vary considerably. In selecting and pricing professional risks, underwriters look at a variety of factors. These include the obvious ones, such as the number of employees and the location of the risk. Other factors include the industry, employment practices, loss experience and operating characteristics.

Because of these variables, EPL policies come in a wide range of types and are offered by a number of different insurers. Often, the best price, coverage and service option may be provided by a smaller specialty insurer rather than a well-known multi-lines insurer. Because of the specialty nature of the business, EPL insurance is traditionally considered to be part of the specialty lines insurance market. In many cases, coverage is provided in the surplus lines insurance market rather than the admitted market.

Comprehensive, competitively priced EPL coverage (see here) is available through Mercator for all types and sizes of accounts. We can provide either stand-alone EPL coverage or EPL coverage as an extension to a D&O or other type policy. Our best results have been with firms employing 20-500 employees, but we have had success with all size organizations.

For most accounts, we indicate terms and conditions with minimal information - reducing your work and speeding up your client response. EPL coverage is a great opportunity to obtain a new account or sell the coverage to an existing account. Many entities do not have coverage now, and need this coverage.

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