While there is sizable demand from insureds for coverage against the increasing tide of wage-and-hour claims made under the Fair Labor Standards Act, carriers remain largely reluctant to write policies—fearing a good chance of losing their shirts if they do.
Costl
y—and highly unpredictable—litigation is mushrooming over the issue, and if an underwriter is not careful, it can be "a great way to lose money," says William Boeck, senior vice president, insurance and claims counsel for Lockton Financial Services, a unit of Kansas City, Mo.-based insurance broker Lockton.
Some carriers are withdrawing wage-and-hour coverage altogether, while others are withdrawing coverage in certain jurisdictions or for certain industries, observes Helen Savaiano, president, management liability at the Hanover Insurance Group, which offers EPLI coverage aimed at middle-market accounts nationwide.
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