From the Front Lines: Employment Practices

Charlie Morriss picture 2015Charlie Morriss

Management Liability Practice Leader
Propel Insurance
Tacoma, Washington

How did you get started in your agency and how did you become an EPLI specialist?

My first job out of college was as a paralegal for Pugh Jones Johnson, a mid-sized law firm in downtown Chicago. One of the partners specialized in employment law and that’s how I first gained some of the experience that would lead me to becoming a broker for EPLI. After that, I went to law school and practiced law for a few years before switching to being a broker with a large national brokerage firm.

Propel is the largest privately held brokerage firm in the Pacific Northwest and continues to grow. I was hired as part of Propel’s strategy to offer full service to their clients, including experts in various coverages such as workers compensation or medical malpractice. My role is to lead the management liability practice, which includes employment practices liability insurance (EPLI).

What are you most passionate about within the EPLI market?

As I talk to my clients who have had EPLI claims, they almost always tell me their employment lawyer is the “best in the country.” Of course, these are usually not the same lawyers. I suspect my clients end up with such trust and confidence in these attorneys because employment lawsuits often arise out of very sensitive, emotional situations that the clients have not likely faced in the past. I see this firsthand when my clients have insurance claims. So I am passionate about EPLI because I know that the insurance not only provides a positive financial impact for the company, but also helps alleviate significant emotional situations for the people who work there.

What are the biggest changes you’ve seen in EPLI over the past few years?

As the product has matured, I have seen it evolve from being an add-on endorsement to a private-company D&O liability policy to a stand-alone product with its own specific structure. For complex organizations, often it does not make sense to share limits among those coverages. Also, late reporting has been a problem under EPLI, as clients aren’t aware that a written complaint by an employee or an EEOC notice can be a “claim” as defined by the policy. Unfortunately, most of the creative solutions to that problem that have been attempted over the years have had significant flaws and pitfalls. EPLI policies have also become more restrictive in how they will cover fair labor standards act claims—a financial risk that many of my clients would choose to transfer to the greatest degree possible.   

What do you say to a first-time client looking at EPLI coverage?

I often talk about a case I worked on before law school. A woman sued her employer after having worked at the company for less than two months. It is not an exaggeration to say that the attorneys on the case spent far more time figuring out had gone on in that workplace than the plaintiff spent working there. After spending six figures defending the claim, it was settled for less than $10,000. It is a situation that could happen to almost any employer.

When talking to potential clients, you never know whether or not the person on the other side of the table has had personal experience with an employment dispute. Don’t be afraid to ask up front.

Do you have a favorite EPLI success story?

I once placed a new EPLI policy for a large university, and about a month later they were sued by one of their professors. It was a challenge to have the claim paid, because EPLI was new coverage for them, so they had to demonstrate that they did not know about the professor’s intentions when they filled out their application. At the end of the day, it was determined that the claim was truly out of the blue, and was paid.

What do you hope to see in the future for EPLI?

I would like to see more companies buy the coverage as a separate product from D&O liability to avoid certain complications down the road. I would also like to see an insurer that can properly underwrite and cover fair labor standards act claims. This might not be possible, but it would surely be a popular product.

Morgan Smith is IA assistant editor.