LIABILITY INSURANCE
arrangements, missed opportunities at
promotion, and Fair Labor Standards Act
(FLSA) violations of nonexempt employees
working longer days, among others. If
the claim falls under “wrongful acts,” the
employer is provided coverage under EPLI.
Then, of course, there are the exposures
that one generally associates with EPLI.
WAGE-AND-HOUR CLAIMS
Such claims may arise out of a variety of
scenarios, such as when employers alter
time records to avoid paying overtime,
misclassify exempt and nonexempt
employees and independent contractors, or
fail to provide due rest and meal periods.
Defense costs for these lawsuits can be
substantial, especially when they become
class actions. Most employment practices
liability insurers now specifically exclude
coverage for wage-and-hour claims, among
other types of FLSA violations.
However, as with whistle-blower and
retaliation claims, wage-and-hour claims
may still be entitled to the cost of their
defense under many EPLI policies’ broad
“duty to defend” language. Likewise,
the wage-and-hour claim may implicate
coverage where the claim is itself based on
a generally unfair business practice that is
otherwise covered under the policy.
SEXUAL HARASSMENT
Claims of sexual harassment are usually
covered under EPLI. As these claims often
allege failures at the corporate level as
well (e.g., failing to put in place workplace
safeguards and policies), such claims may
involve D&O coverage as well.
RETALIATION
The number of whistle-blower and
retaliation claims continues to rise as
workplace regulations and whistle-blower
protections increase. Coverage for these
claims, and their high cost of defense, is
usually available under EPLI.
Check your policy for actual coverages or
ask your agent to include these coverages
on your current policy. If you have any
questions, you can reach me at 290-
884-2850 ext.5085 or michael.tiedt@
spectruminsgroup.com. +
Mike Tiedt is a partner at Spectrum
Insurance Group since 2009. Mike
has over 25 years in the insurance
industry helping clients with their risk
management programs.