Category: General Liability Insurance
What is EPLI (Employment Practices Liability)?
Employment Practices Liability (EPLI) is normally a separate insurance coverage although at times it may be included as a sub limit under the existing General Liability within a carrier’s program. However, being included as a sub limit is more of an exception than a rule therefore having a separate policy is more of the norm.
EPLI covers the insured against claims and/or lawsuits from an employee. Although many employers believe they are covered under their General Liability, this is a huge misnomer that can end up costing them thousands. The only exception here is if the the claim is a result of a worker’s injury in which therefore the Worker’s Compensation would be triggered.
Employment Practices Liability covers the employer against things like wrongful termination, sexual harassment, discrimination, prejudice, wrongful discipline, wrongful infliction of emotional distress and so forth. Whereas General Liability protects against third party claims, EPLI guards against first party claims.
Something to keep in mind is that whether the accused is innocent or guilty the costs alone to defend can be and usually are very expensive. This is where EPLI kicks in as it will normally pay for the defense and settlement, if any, as the court determines. Of course it is very important to read the specific policy as all carrier’s policies are not the same in regards to coverages and limits.
Generally EPLI can be affordable by obtaining different quotes through varying carriers that are online. Usually through an online quote or online process EPLI quotes can be readily obtained. As with any insurance it is in the insured’s best interest to inquire of different sources before making a final decision once coverage and limits are favorable.
In closing, many insureds find the value and peace of mind of Employment Practices Liability or EPLI to be well worth the cost as America has become a very litigious society.
What is Directors and Officers coverage?
This is a question often asked by insureds when their insurance agent suggest getting a quote for this coverage. Usually insureds think that their General Liability will cover this risk, however, this is truly not the case. As a matter of fact without this coverage Directors and/or Officers of a corporation can be completely exposed personally for their actions should a suit arise.
From large corporations to small businesses to non-profits all can have some degree of exposure and therefore should have Directors and Officers coverage, otherwise known as DNO coverage. For the people on these boards Directors and Officers (DNO) coverage is essential should they be brought into a law suit for their actions and/or decisions which a third party is suing over.
Although many boards do not understand the importance of this coverage for their personal exposures it is vital that corporations have this in place. Unfortunately many board members do not request to see the policy prior to their service to their potential detriment.
There are a number of carriers that offer Directors and Officers coverage however it is limited in comparison to the carriers that write General Liability. There are a few companies that specialize in this coverage one of which is “Monitor”. This carrier for example has broad coverage when compared to other General Liability policies with Directors and Officers included. For this reason it is essential to read and fully understand the coverage afforded in these policies as with any insurance.
As always different carriers may rate differently thus charging different premiums. For this reason obtaining mulitple quotes is important once the coverage is determined to be adequate for the exposures. By requesting different quotes insureds will glean a broader understanding of the carrier’s policy and pricing and will be better informed even if using an insurance agent.
With the internet many companies are available to quote online or over the phone at no cost to the insured or the one seeking this coverage. Usually an application is required along with a Loss Runs report if there was prior coverage. Of course Loss Runs would not be necessary if Directors and Officers coverage was not prior. If this is the case the carrier may request a “no loss” letter stating there have been no knowledge or action against the corporation.
Once a carrier has offered a quote and the insured accepts, the insured can bind coverage with the payment and the board can rest easy knowing that they are personally covered for their actions as a Director or Officer on the board.
Day Care Insurance
Day Care Insurance is a specific type of insurance program that specifically is designed to address the unique risks of a day care or Montessori School. Although there are similar types of programs such as School Insurance or Social Services types of insurance, Day Care Insurance is unique due to the age of the customers, scope of the program and the employees.
As with any insurance program you always have your General Liability and Property Coverage along with coverage for any autos you may insure. However this is where most similarities end. With Day Care Insurance you will need to have at least two other coverage types.
First you will need “Sexual Abuse and Molestation” coverage as this is not a covered cause of loss or liability under the GL or Property coverages. Sexual Abuse and Molestation will cover those things as the name implies. The most important thing to remember is that these allegations will cost you money, whether in attorney fees and/or reduction in enrollment when the story breaks. Either one is certainly enough to bankrupt a business.
With a number of programs that offer this coverage they will also have some sort of limit to cover the Public Relations that will need to ensue. This is to help the business owner recover after such an ordeal, provided the accusation was against one of his or her employees and not the owner him or herself.
Second, a Day Care Insurance program should incorporate an Accident Policy. Although this is a Life and Health product this coverage is unique to schools and daycares as it pays for injuries to students that get hurt during the school’s or daycare’s hours of operation. In return this usually eases the parents initial concern which alleviates the temptation for litigation.
Of course with any insurance it is important to listen to your insurance agent and ask questions. So be sure to work with an agent who meets with you personally and understands your unique business.
Insurance Deductibles
Insurance Deductibles can sometimes confuse consumers when it comes to when and how claims are paid. Typically there is some sort of deductible that will apply either before the payment is made or taken out of the monies to be paid. Regardless of how the deductible money is received, in the end it all comes out the same in regards to the final claim amount that is paid.
Where things can sometimes become a little more tricky is when it comes to percentage deductibles on property claims involving wind and or hail. In some areas that are more prone to hurricanes, such as Florida, Louisiana, Texas and all the other Gulf coast states, insurance companies will typically apply a 1% or 2% deductible on the insured amount for the building and or contents. In some cases, there have either been a 5% deductible or a complete exclusion of wind/hail damage.
Of course it will always be very important to consider the amount of the deductible and be sure that it is affordable to you. Of course deductible amounts can be either increased or decreased depending on the policy. With this said the premium will usually increase with the lower deductibles and increase with the higher deductibles. Therefore, some may choose based on what their finances and/or risk tolerance will allow.
Something to note is that some deductibles are in the form of what the insurance world calls a “Time Element” deductible which is usually seen “Business Interruption” claims. Although we are not looking into this coverage specifically it is important to know if you have a 72 hour waiting period or a 0 hour waiting period as this makes a big difference. And or course learning after a loss is never a good time to discover this.
When it’s all said and done the most important thing is to have the right coverage and deductibles that you are aware of and accept. So be sure to go over your policy once a year with a trained professional and keep your deductibles down by preventing and or reducing claims.
What is General Liability Insurance?
Most have heard of General Liability Insurance although most may not fully understand the purpose and coverage of General Liability Insurance. Of course the most obvious understanding is that it covers general liabilities that one, or a business, may face in their everyday life or operations. However, as the name implies it only covers those general risks and does not expand to also cover specific types of risks.
The general application of this insurance really comes into play for things like falling on someone’s premises, injury to someone on your premises or while driving, damaging someone’s possession in non-specific roles and many other basic risks. The reality for many in business however revolve around more specific types of risk.
Examples of risks that typically are not covered under the General Liability would be; a construction project which would require Builder’s Risk; abuse of a person which would be Abuse and Molestation coverage; directors on a board would need Director’s and Officers coverage; an engineer would need Professional Liability coverage; a lawyer would need Error’s and Omissions coverage; and a tenant would need a Fire policy for the leased space. Obviously this list is only a sample of the few types of General Liability coverage that is available, but the point is straight forward enough.
It is very important to know that unless your policy specifically addresses unique risks, typically it will not cover the insured in cases involving those claims. Here is where the problem lies as many have found out either through personal experience or knowing someone who has gone through some sort of litigation. Whether guilty or not of the accusation(s) the cost of defending oneself in court is extremely expensive, and to not have the right coverage in place prior to the incident can end up costing tens of thousands. For this reason it is highly important to know your risks and coverage by working with the an insurance professional familiar with your specific industry.
One final thought about General Liability Insurance, make sure the limits you choose for the aggregate and per claim are sufficient for the risks of your specific industry.
