The pandemic issued a shock to the employment practices liability insurance market. As workers were ordered to work from home, it created a “dramatic couple of months when new business was difficult to place and renewals were getting hit with higher retentions and questions around vaccination policies," recalls Seth Brickman, managing director at Business Risk Partners, a specialty insurance underwriter and program administrator.

However, this episode in a market that rose to relevance in the 1990s exemplifies two of its biggest characteristics as “a robust and reactive market," Brickman says. He points out that, despite its mini-crisis in 2020, the market has “abundant capacity," which is provided by both traditional players and new entrants, such as InsurTechs and reinsurers.

While one of the lasting legacies of the pandemic is an increase in remote workers, that too has left an imprint on EPLI due to increased exposure from remote discrimination, which is an area that contains many of the same hallmarks as in-person work but also ushers in a whole new dimension of hazards for employers.

“Remote work discrimination is treating employees who work from home differently in the terms and conditions of their employment compared to those employees who come into the office," says Chris Williams, employment practices liability product manager at Travelers.

While Congress has not passed any laws mandating that remote workers are a protected class, treating remote workers differently carries certain risks.

There are two sides of the coin to discrimination in remote work, Brickman explains. “First, there is discrimination through disparate treatment on the basis of race, color, religion, sex or disability," Brickman says. “But then there's the other side of the coin: getting discriminated against simply because you are a remote employee."

“Telecommuting discrimination, also known as remote work bias, can take on various forms that differ from traditional workplaces. These may include unfair or unequal pay, failure to promote, exclusion from important meetings or work opportunities, and a lack of training," says Bill Holden, senior vice president, executive liability, The Liberty Company Insurance Brokers, in Los Angeles. “Over time, these disparities could lead to allegations of discrimination, claiming that remote workers were not provided the same opportunities as their in-office counterparts."

Meanwhile, the remote work environment means that there is frequently a digital trail, such as emails, recorded conversations, text messages, phone records and more, allowing remote employees to provide evidence in a discrimination complaint.

To defend themselves against claims, employers are covered for the most part by an EPLI policy. The benefits include the fact that “carriers often have negotiated rates with defense firms that can be lower than what is available in the open market," Williams says. “The carrier can also provide clients with risk management resources, training materials and updates on employment laws to help the employer mitigate their risk to employment lawsuits."

A key area where agents can provide options to employees is regarding wage and hour coverage, “because everybody in the industry has taken a unique approach to sublimits within their policy," Brickman says. “It's probably one of the most applicable coverages with respect to remote workers."

“Hourly employees cannot work more than an eight-hour day, they must get their 15-minute breaks, they must get their lunch break and they must record their time," he says. “We tend to see a lot of wage and hour claims around misclassified, lower-level office employees."

To reduce their exposure, “employers should provide clear and precise guidelines on issues unique to remote work," says Peter Taffae, managing director of ExecutivePerils. “Such guidelines will provide transparency for all those interested in working remotely. Documenting such guidelines will also provide precedent which makes it clear that the employer is not discriminating against any individuals."

While nothing guarantees that a lawsuit will not be filed, a prudent employer will call upon outside counsel to classify their employees correctly and ensure that any potential termination is in accordance with company policy and applicable laws and regulations.

Employing a full-time HR employee is also a safeguard against claims and a method for implementing strong corporate governance, according to Brickman. He points out that a dedicated HR professional can ensure that jobs are posted internally, morale-deflating production metrics are avoided and managers are encouraged to build a human relationship with their employees.

“Ongoing training for both management and employees on workplace practices, including remote work, performance evaluations, promotions and job postings, is crucial," Holden says. “Posting essential policies and obtaining employee sign-offs, such as Equal Employment Opportunity Commission (EEOC) statements, non-discrimination policies and anti-harassment statements, can reinforce the company's commitment to fair treatment.

“Involving HR at both the corporate and local levels and giving them reporting responsibilities to the board of directors ensures HR's active participation in corporate planning and risk management," he says. “While these measures may not prevent all claims, they can provide a strong 'paper defense' in the event of legal challenges.

“Remote discrimination has existed for a long time but only with COVID-19 is it getting the attention it deserves," Taffae adds. “Employers have to follow the laws surrounding discrimination with remote employees just as they would with employees in an office setting."

Will Jones is IA editor-in-chief.