Employment Practices Liability Insurance
Employment-related lawsuits are a growing concern for employers of all sizes, including home-based businesses. Marshall & Sterling, Inc. can help you manage all your business risks, including employment practices liabilities.
What is Employment Practices Liability Insurance?
Employment practices liability (EPL) insurance is a policy used to cover your risks due to some of the most common employment-related lawsuits, including the following:
- Wrongful termination: The discharge of an employee for invalid reasons.
- Discrimination: The denial of equal treatment to employees who are members of a protected class.
- Sexual harassment: Subjecting an employee to unwelcome sexual advances, obscene or offensive remarks, or the failure to stop such behavior.
EPL works to provide the necessary resources to defend your company against a lawsuit or to pay for a claim. To best understand how to cover your EPL risks, it’s important to know the potential sources:
- Recruitment practices
- Annual conduct reviews
- Employment applications
- Enforcing performance policies
- Employment offers
- Employee orientation process
- Improper documentation of the items listed above
As costs for litigation and damage awards climb, experts predict that employment liability will only become more complex. As a result, it is critical for business owners to understand their exposures and options for managing risks. Contact us today.
Directors & Officers (D&O) Insurance
The frequency of director and officer liability exposures, and the amount of damage awards are rapidly increasing, leaving no companies safe from claims. It is important to provide adequate coverage to attract directors and officers to company boards. Likewise, when considering joining a board of directors, be
sure the company’s policy covers claims against directors and officers.
Directors and officers (D&O) insurance is a unique insurance product. This important coverage should be obtained from an insurer that has significant D&O insurance experience that can address the complex legal and risk management issues.
D&O insurance can be difficult to purchase for two reasons:
- Insurance companies do not use a standard form. Each carrier has its own form with varying terms and conditions.
- Companies offering this coverage are located throughout the world and, therefore, it is difficult to pursue all appropriate providers.
Marshall & Sterling Insurance is one of the most experienced Property and Casualty insurance brokerage firms in Kingston. We have the resources to access most of the world’s major D&O markets. The best product for your company can be sourced quickly, whether it comes from the United States, London or elsewhere. We will also provide you with thorough comparisons and ensure that the final terms and conditions are best suited for your situation.
Fiduciary Liability Insurance protects fiduciaries against legal liability for claims arising out of their roles. These policies are stand-alone, yet there are several other protections available for organizations wishing to protect themselves:
- Fidelity bonds are required under ERISA and are designed for safeguarding beneficiaries when administrators or trustees financially harm an employee benefit plan. This bonding insurance is only designed to benefit the plan and beneficiaries and will not protect the trustees from liability claims (the difference as compared to Fiduciary Liability Insurance).
- Employee Benefit Liability (EBL) insurance covers claims arising out of errors or omissions while administering a benefit plan. EBL does not protect against all fiduciary responsibilities and may be included in a Fiduciary Liability policy.
In addition to these coverages, similar protection may be adopted using Directors and Officers (D&O) Liability Insurance, Commercial General Liability (CGL) or Trust E&O/Professional Liability coverage with an endorsement covering fiduciary liabilities.
In addition to Fiduciary Liability Insurance, there are additional ways to limit your liabilities, such as documenting the processes used to carry out their fiduciary responsibilities. Here are some other ways to limit your liability:
- Some plans, such as most 401(k) or profit-sharing plans, can be set up to give participants control over the investments in their accounts. For participants to have control, they must be given the opportunity to choose from a broad range of investment alternatives. Under the U.S. Department of Labor regulations, there must be at least three different investment options so that employees can diversify investments within an investment category, such as through a mutual fund, and diversify among the investment alternatives offered. In addition, participants must be given sufficient information to make informed decisions about the options offered under the plan.
- Hire a service provider or providers to handle fiduciary functions, setting up the agreement so that the person or entity then assumes liability for those functions selected. If an employer appoints an investment manager that is a bank, insurance company or registered investment advisor, the employer is responsible for the selection of the manager, but is not liable for the individual investment decisions of that manager. However, an employer is required to monitor the manager periodically to assure that it is handling the plan’s investments prudently.
Protecting your fiduciary duties can be quite complicated. Let our team at Marshall & Sterling guide you through the process. Contact us today at (845) 331-2255 to learn more.