The following is a recap of the types of coverage for wage-and-hour exposures that are currently available:

o Defense-only sublimits:

At least 16 different insurance organizations offer defense-only sublimits, according to published research reports and additional information obtained by NU.

The December 2009 edition of "The Betterley Report," authored by risk consultant Richard Betterley of Sterling, Mass., lists 13 distinct insurers.

NU counted Lloyd's only once to arrive at the 13-carrier total, although the Betterley Report actually lists five separate program managers representing syndicates at Lloyd's (http://betterley.com/samples/EPLI09_nt.pdf).

New York-based Advisen, in an April 2010 report, provided a smaller list, but added two more names--XL and Philadelphia Insurance--not included on Mr. Betterley's list.

Also not included on Mr. Betterley's list is QBE Insurance, but Seth Brickman, a senior underwriter at Windsor, Conn.-based Business Risk Partners, told NU he manages EPL products for both QBE and Lloyd's.

While the published reports do not provide details of target markets for the various defense-only offerings, Mr. Brickman said his QBE admitted product, with a $100,000 sublimit, is for employers with less than $200 million in assets and under 2,000 employees.

Industry targets include manufacturing, services and most "run-of-the-mill" private company classes, he said. BRP cannot write not-for-profit, public, financial institutions (FI) or health care risks under the QBE program, he added.

BRP's Lloyd's product has a standard $150,000 sublimit, "but on a risk-by-risk basis," up to $1 million is potentially available, he said, adding that the Lloyd's facility handles the tougher risks, such as municipalities and casinos.

Under the Lloyd's program, "most any asset size and employee count can be considered, and we even have special forms for lawyers, PEOs [professional employer organizations], staffing agencies and property managers," Mr. Brickman said.

"While this facility is still not for general FI business, we do some insurance companies, investment advisors and easier FI" risks," he added.

o Exclusion Carveback:

Providing some EPLI coverage basics, Mr. Brickman explained that most base policy forms have a full FLSA (Fair Labor Standards Act) exclusion.

Wage-and-hour defense-only coverage is then added by endorsement, and is generally available for both single and multiplaintiff/class-action claims.

Some carriers have started to provide a carveback to the base form exclusion stating that for single-plaintiff FLSA claims, defense will be provided so long as there is another covered wrongful act to go with it.

BRP does not provide this carveback on its QBE form, but does with the Lloyd's product.

o Defense-and-Indemnity Sublimits:

The Betterley Report lists Markel and HCC's AVEMCO as the only two carriers offering sublimited defense and settlement coverage, but NU has discovered at least two additional carriers also offer it.

Paul Tomasi, president of E-Risk Services in Flanders, N.J., confirmed that his firm manages Scottsdale Insurance's EPL product with a defense and indemnity sublimit but was unavailable to provide further details.

Christine Murray, vice president and in charge of EPL and D&O for United States Liability Insurance Group, said the carrier offers a $100,000 sublimit for no additional premium to all types of employers in its target market (those with 500 employees or less), as long as the employer is not in California or Florida and it does not have prior claim activity.

At Glen Allen, Va.-based Markel, Managing Director Sal Pollaro confirmed that the carrier continues to offer a defense-and-indemnity sublimit--typically $100,000, but with flexibility up to $200,000, for employers with up to 500 employees. Markel is also poised to launch a management liability policy that will include an EPL wage-and-hour sublimit as well, for employers with up to 3,000 employees.

The only ineligible class will be financial institutions.

"It's not unavailable in California," he said. "It's available subject to underwriting" in the state perceived as a particularly tough write by carriers generally.

Darryl McCallin, EPLI program manager for Rockwood Programs in Wilmington, Del., said Rockwood underwriter Meghan Bell handles new EPLI business for HCC's AVEMCO, which continues to offer a $100,000 sublimit for defense and indemnity, as it has since 2005. (Houston-based HCC handle renewals for some prior business in house, he said.)

The Rockwood representatives said they see a lot of demand for the wage-and-hour coverage from restaurants and contractors, listing ineligible classes as churches, educational facilities, government entities and law firms.

Rockwood does not offer the coverage in California through its AVEMCO program, but can go to HCC Global, Philadelphia Insurance or Monitor Liability Managers for defense-only sublimits in California, Ms. Bell said.

(What's so tough about California? See "Who's At Risk For FLSA Suits?" in the NU Exclusives section of www.property-casualty.com.)

Special Reports /

Who&#039;s Offering Wage-and-Hour Coverage?

Related Stories

Recommended For You

Who's Offering Wage-and-Hour Coverage?