Order of Events: Submitting Potential EPLI Claims
Employment Practices Liability insurance (EPLI) is coverage that provides protection from claims that might arise from employment or employee-related incidents, such as alleged wrongful termination, harassment, discrimination and retaliation. If you have employees – which every manufacturing facility does – then this is a necessary coverage to have in your insurance arsenal. More importantly, if you have this coverage, remember to use it.
Many times, when a company has a situation with an employee that isn’t related to workers’ compensation, their first inclination is to discuss the issues with their corporate labor law attorney, not their insurance agent. The attorney’s clock starts ticking immediately, and so do their fees. If the claim looks like it might turn into something larger than anticipated, then the insurance agent is contacted.
One potential issue with this order of events is once the EPLI carrier is finally put on notice, the attorney fees that have been billed up to that point typically aren’t covered and can’t be used to erode any type of retention or deductible that might be on the policy. Additionally, many of these EPLI policies require you to use one of their attorney’s or panel counsel to provide defense coverage. Or, at a minimum, the insurance carrier will need to approve your choice of counsel and then provide your attorney with the approved rates that will apply to each associate at the attorney’s office.
Companies also tend to discuss employment-related issues with their attorney first because a.) they don’t believe it’s an issue that would be covered by their policy, b.) they forget they even have the policy, c.) the persons handling the situation might not know about the policy or, d.) in some cases, an attorney has actually told them the situation wouldn’t be covered by the policy.
Always remember, your insurance agent is your resource to help find possible ways to trigger coverage by your policy. But first things first, you need to make them aware of the situation. Register for our upcoming webinar and gain a better understanding of EPLI coverage.
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