From the Front Lines: EPLI

How did you get started at your agency?

I began my insurance career in 1982 working part-time while attending college, where I majored in business economics. I never expected to go into insurance, but as I learned more about the business, I found it challenging and rewarding. With the perpetuation of his agency in mind, the founder of my agency, Pat Abbate, mentored me and encouraged me to make it a career. I purchased the agency in 1998.

Why EPLI?

We are witnessing an extreme cultural shift where headline allegations of sexual harassment are increasing. These complaints must be defended, and average legal costs are on the rise. As employment laws continue to evolve, employers find it hard to stay current on new trends. For businesses, employee lawsuits can be costly—not only from a monetary standpoint but also from a productivity and morale standpoint.

Biggest EPLI changes?

Originally, EPLI policies covered sexual harassment, discrimination, and wrongful termination. Now, coverage definitions are expanding to include invasion of privacy, illegal background checks, health-related employment discrimination, and more.

Greatest EPLI challenges?

With EPLI claims on the rise, it is important that we inform our insureds that these types of exposures are either not covered under their business owners policy or are covered at a minimum limit. Today, that minimum limit is exhausted very quickly based on current legal costs. Even if a claim is unfounded, it still needs to be defended. Without the coverage, the cost could be devastating to a small business.

Future of EPLI?

I think more insureds are going to consider the coverage more seriously going forward. I also expect carriers to expand coverages provided in the forms as new trends emerge, similar to what we are seeing in the cyber liability markets.

EPLI advice for a fellow agent?

Many business owners do not think that this type of claim will happen to them, so I would suggest using claims examples and going through their exposures to show them how they would not be covered. Also, emphasizing the benefit of the loss prevention services provided with the coverage increases the success rate of a sale. Finally, we now obtain signatures from insureds confirming coverage was offered but rejected.

Favorite EPLI success story?

I have a client who for several years did not accept our recommendation to purchase a standalone EPLI policy. The insured had more than 60 employees. A friend of his in the same business experienced multiple claims in a short amount of time, and the expense to defend the claims was devastating. Immediately, my client called us for coverage. He now has access to consulting services and loss prevention resources for setting up policies and procedures to avoid or reduce lawsuits within his organization. After feeling the pain of his friend, he took action to make his organization stronger by utilizing the resources available to him through the policy and our agency.

Will Jones is the IA assistant editor.