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Reacting to Headlines: How to Manage EPL Risk Within the Agency

The recent string of allegations making headlines has brought many individuals (mostly women) forward to talk about their sexual assault and harassment experiences. These conversations should invoke action among business owners, including those in the insurance sector, to review their employee handbooks as well as their Employment Practice Liability (EPL) coverage. This is not a time to panic, but rather a time to be proactive about protecting employees and purchasing appropriate insurance solutions for the agency.


There has been an increase in EPL claims in recent years, so what are proper risk mitigation steps that agency owners and principals should take? First and foremost, make sure you have strong internal practices and policies around sexual harassment, bullying, discrimination and retaliation in the workplace. Then, make sure that your employees understand these policies through training and open communication. And third, be prepared. Understand your EPL policy and if its right for you.


You can start by asking yourself these questions about your agency?

  • When was the last time you reviewed and updated your employee handbook?

  • Are the employment practices policies within your agency sufficient?

  • Have your policies ever been reviewed by legal counsel or a third-party professional?

  • Do you advertise your policies or make them easily accessible for employees?

  • Do you have a zero-tolerance policy within your agency?

  • Do you have ongoing and updated employee training?


Its important to remember that an EPL endorsement on your General Liability or even on your E&O policy will likely not provide the coverage you will need in the event of a claim. Here are some common coverage gaps and what you should look for in your own EPL policy.


  • Third Party Coverage: If a client claimed you discriminated against them, would you be covered? If you’re using an endorsement on your GL or E&O, you might have an exposure. An EPL policy should have Third Party Liability coverage built into the form

  • Hour and Wage Defense: Would your coverage defend you if an employee or contractor alleged that you paid them improperly? Your EPL policy should provide coverage for the entity as well as employees including: part-time, leased, seasonal, temporary and volunteers

  • Optional Duty to Defend Provision: Your policy should provide you with the option to choose your own defense counsel or tender the defense to the underwriter

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