EMPLOYMENT PRACTICES LIABILITY INSURANCE 

In 1991 there were five carriers offering Employment Practices Liability Insurance ("EPLI") coverage; today, there are 50-55, writing premiums of over $1.6 billion.  EPLI has become an increasingly common tool used by employers in connection with their efforts to contain defense costs when employment litigation or other employee-related claims occur — which is virtually unavoidable over the long term. 

In the early days of the EPLI industry, insurers commonly charged what the market would bear and retained full control over the selection of counsel to handle a covered claim.  As a result of increased competition among EPLI providers, however, premium costs have fallen, new coverages have been provided (such as for the defense of wage and hour claims), and carriers have become more accommodating in connection with certain key provisions central to EPLI policies, such as the insured employer's right to choose defense counsel in the event of employment litigation or another covered claim.

If you have purchased, or are contemplating purchasing, Employment Practices Liability Insurance ("EPLI"), you should be aware that many policies still limit your ability to select the lawyers or law firm of your choice in the event a claim is filed for which there is coverage under the policy.  Instead, employers are often required to select counsel from the carrier's limited list of pre-approved counsel.  As a result, you may not be able to have Walter & Haverfield represent you and your company as we have in the past — unless you take steps to ensure your right to choose counsel. 

As The Betterly Report, an insurance-industry publication, has stated:  "We believe that the relationship between counsel and client is a precious one, as trusting as the bond between patient and doctor."  We wholeheartedly agree with this assessment; and the significance of the relationship between client and counsel is never more pronounced than in a time of crisis, such as when an employee files a lawsuit or other claim.  In order to insure that you have the opportunity to have Walter & Haverfield represent you in these instances, please consider taking the following steps:

•           When you obtain or renew a policy of EPLI coverage, insist upon the right to select counsel in the event a claim is filed.  Your leverage is greatest at the time of purchase or renewal; and if your carrier or prospective carrier is uncooperative, let them know that you are aware that alternative carriers exist who are more cooperative.

•           Request that Walter & Haverfield be placed on the approved counsel list for your policy in advance, in the event a claim is filed against you for which there is coverage.

•           In the event that a claim occurs before you have had a chance to take the above steps, request that Walter & Haverfield handle that matter.

            Walter & Haverfield attorneys have been successfully litigating employment cases across the country for over 75 years.  Our labor and employment law attorneys not only represent employers in state and federal courts, but also before all state and federal agencies regulating employment.  We are actively engaged in providing our clients with legal advice regarding the prevention of discrimination, wrongful discharge, sexual harassment and similar employment claims, as well as assisting our clients in understanding and complying with their obligations under the myriad of federal, state and local employment laws and regulations. 

It is always our goal to both limit the potential for employment litigation — through education and employment policy and compliance initiatives — and to maximize our clients’ ability to successfully defend themselves if litigation nevertheless occurs.  With respect to litigation, we are equally comfortable aggressively pursuing a sensible settlement, if that is in the client's best interest, and aggressively litigating claims through all stages of appeal, when settlement is inappropriate.  Finally, we are sensitive to the economic impact of litigation, and pride ourselves on cost-effective representation.   

We would be pleased to answer any questions or provide further information to you, your insurance brokers and agents, or insurance carriers.

For more information on these or other employment law issues, please contact one of the attorneys in Walter & Haverfield's Employment and Labor Group: