Minimize exposure

The basic insurance coverages for all companies include some type of policy for property, equipment, general liability, workers’ compensation, automobile and excess/umbrella coverage. Many of the contracts that snow contractors enter into will have requirements for most of the coverages listed above. However, there is an ever-increasing need for additional coverages to protect your business.

Employment-related claims for harassment, discrimination, wrongful termination, retaliation, defamation, unfair hiring practices and other workplace torts are on the rise. Have you received a notice from the Equal Employment Opportunity Commission (EEOC)? When this happens, where do you turn, what do you do?

If you have an employment practices liability policy (EPL) in place, you can turn that complaint over to your insurance carrier; they will provide a defense for you and potentially pay to indemnify the complainant. The insurance carriers have contracts in place with employment lawyers to help guide and defend you.

If one of your employees were to be accused of harassment, discrimination or defamation while out on a jobsite or in an office, an EPL insurance policy provides coverage for claims brought by past, present and prospective employees, as well as independent contractors, and could also provide third-party coverage.

EPL options

There are a couple of different options for securing employment practices liability coverage. It is important to note that there are differences in coverages with each policy; please contact your agent to discuss your particular policy. Some insurance carriers can include limited coverages on their general liability policy. These limits are usually at a smaller level (example: $25,000 each claim / $50,000 aggregate, or the most they pay in a policy term).

Here are a few things to consider when purchasing an EPL policy, aside from just the primary limit:

1. Deductible or retention. Most policies will require a deductible, typically starting around $2,500 or $5,000.
2. Third-party claim coverage. Does it protect your business from complaints from a client alleging harassment, discrimination, etc., by an employee? Third-party coverage typically will have a sublimit (smaller limit compared to your full policy limit protecting first-party claims).
3. Carve-back coverage. Is there a carveback of coverage for claims alleging retaliation in connection with COBRA, ERISA, OSHA, workers’ compensation or unemployment laws? A carve-back clause allows coverage to apply in situations that would otherwise be excluded.
4. Duty to defend. Does your policy have a duty to defend you on each claim, or are you responsible for hiring your own attorney? If your policy has a duty to defend, the insurance company will hire an attorney that will represent you in all matters relating to the claim.

EPL resources

Another advantage to having a separate EPL policy is that many carriers will provide you with risk management tools so that you may proactively mitigate your exposures in this area. They will provide training programs, legal briefings and timely and relevant articles. Some might even offer a hotline to a team of employment law specialists that can assist you with questions you or your human resources manager might have.

Consult with your agent to make sure you understand the coverages you currently have and if you are comfortable with the coverages and limits you have available to you.

Jay Long is director of commercial insurance for The Hilb Group of New England LLC dba Gerardi Insurance Services Inc. Contact him at jlong@hilbgroup.com.