Regional insurer Acadia Insurance Co. is going to be offering a new type of coverage in Rhode Island, Connecticut and Maine, starting Sept. 1. Employment practices liability insurance will offer small businesses protection against employment-related claims such as discrimination and harassment. Bobbi Amero, Acadia’s chief underwriting officer, answered five questions about the new product.
PBN: Under what circumstances would EPLI protection kick in?
AMERO: This coverage is written on a claims-made basis, so it is designed to respond when we receive notification of a claim. Typically, a claim is reported when an insured [company] first becomes aware of an employment-related incident, claim or lawsuit. Employment-related lawsuits can be a serious hazard to all business, regardless of size. Unfortunately for small-business owners, a single employment-related lawsuit can drain them of their time, money and even their business. According to the Equal Employment Opportunity Commission’s website, in 2009, it received its second highest level of charges ever – more than 90,000 adjudications resulting in more than $376 million in judgments. The most frequently filed charges include: racial discrimination (36 percent); retaliation (36 percent); and gender discrimination (30 percent).
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,…
Learn More
PBN: Why did Acadia decide to offer this type of coverage? In this litigious world, it seems like it would be risky?
AMERO: To meet the needs of the small-business owner and to further enhance our competitiveness in the small-business market. By offering risk-management resources, we are able to help our small-business customers recognize, and hopefully avoid or mitigate, employment-related risks.
PBN: Who is eligible for this coverage, in terms of businesses? And which employees would be covered, if any?
AMERO: This relevant coverage will be offered to all new and existing customers’ [business owner’s policy], package, and Massachusetts garage polices with liability premiums up to $7,000. Customers will be given the option to opt out of the coverage should they choose to do so, with an opt-in option for Maine. The coverage is intended to protect the business owners in the event of an employment-related lawsuit or claim.
PBN: Are there some type of businesses that, because of their nature, would be ineligible for this type of coverage?
AMERO: There are no restrictions by type of business or industry.
PBN: Is $100,000 limit enough, particularly if defense costs are covered only within the limit?
AMERO: This coverage is tailored for the needs of small business owners, and therefore, it is designed to provide affordable coverage to help mitigate against the costs associated with the defense and payment of employment-related claims or lawsuits. If a business owner feels they need more coverage, then they should speak to their independent insurance agent about additional coverage options.
