Will master Cyber policies be the next EPLI product for PEOs?

With two carriers now offering master PEO cyber programs, the question here is PEO’s be able to sell these as part of their overall package?

A recent 2017 RIMS survey has shown that 83 percent of organizations have a standalone cyber insurance policy (up 3 percent from 2016) and only 14 percent are utilizing the cyber coverage offered in their other insurance policies.

One reason for this statistic could be that Risk Managers want specific endorsements and add-on coverages that apply directly to their industry or are a result of a problem they’ve faced in the past.  This has been a crucial part of individual cyber policies over the past few years as the carriers try to keep up with the quickly evolving cyber space.

With the above in mind, it may be difficult for PEO’s to make this as part of their basic package as EPLI has become over the past decade.

I would like to note the PEO cyber program has one crucial endorsement, Social Engineering, that can be added on for an individual client company.  This has to be individually underwritten for each client company adding another layer for the PEO sales rep to cross-sell.

If you work in the PEO industry, please comment below with your thoughts of PEO’s offering cyber coverage to client companies. For more statistics from the RIMS survey please visit: http://www.insurancejournal.com/news/national/2017/08/25/462357.htm

 

-David Campbell

Risk Consultant at Libertate Insurance

Does your EPLI policy cover against employee harassment to a Third Party?

Most employers understand their Employment Practices Liability Insurance policy to cover against employee to employee or employer to employee harassment and discrimination.  But many of these employers could be liable for claims that they do not have coverage for under their current EPLI policy without the proper endorsements.  The most reoccurring of these claims have been third party claims against the behavior of your employee to the third party.  The language in a Lexington policy of an event resulting in a claim is: “allegation(s) of intentional or unintentional Discrimination, Harassment or any civil rights violations committed by an Insured and brought by a Third Party, whether such event against the Third Party occurs directly or through the Virtual Environment.”.  Their terminology for this coverage is Wrongful Business Environment.

So, we have coverage for your employee harassing or discriminating against a third party.  But what happens when the scenario is flipped and a third party discriminates or harasses your employee?  The employee would go to the employer or manager, and one of two things will happen: The employer will address the issue or the employer will ignore the issue.  In the first scenario, the employer and employee can work together on behalf of the employee to file a claim against third party’s employer.  Let’s hope they have third party coverage on their EPLI policy.  In the second scenario, where an employer fails to do anything, the employee can file a claim against the employer.  This would actually be looked at as a “hostile work environment claim” (your typical EPLI claim) and would be covered.  In this scenario, as well, the employee would also be able to go after the third party’s employer as well.

 

For more examples and details on this coverage, please visit: : http://www.propertycasualty360.com/2006/11/01/third-party-coverage-can-be-an-important-part-of-epli-policies

“Suppose a document messenger makes daily stops at a real-estate agency, where he greets the receptionist. After a number of visits, the messenger begins making suggestive sexual remarks. The receptionist complains to the owner of the business, who does nothing other than advise the receptionist to just tell the messenger to stop bothering her.

One day the messenger appears and makes suggestive remarks to the receptionist and even touches her inappropriately. Visibly shaken, the receptionist complains again to her boss, who takes no action. Not being able to endure the continuing harassment, the receptionist quits and sues her boss for emotional distress and failing to prevent an assault.

This is a clear example of an employer tolerating a hostile work environment, a typical EPL claim. The mere inaction of the employer makes him responsible. This also could be pursued as a third-party claim against the messenger’s employer.”

 

If you have any questions regarding your EPLI policy or would like a free audit of your current policy and coverage, feel free to reach out to David Campbell at dcampbell@libertateins.com or 407-613-5483.

Employment Practices Liability and the EEOC

The U.S. Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person’s race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. It is also illegal to discriminate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.

This website is an essential resource for every Business Owner and HR Manager.  You will find useful information, such as enforcement and litigation statistics for all enforceable statutes and real world inquires received by the EEOC’s Legal Counsel.  Data is available by state and type of charge to help you better analyze your organization’s EPL exposure.  Combine this with an in-depth coverage analysis and you will be taking the right steps towards managing your EPLI risk.

EEOC Home Page