What Are Common Coverage Enhancements On an EPL Insurance Policy?

Wage & Hour
EPLI will normally not cover disputes related to the non-payment of salary, overtime, and benefits. These claims are too common for every policy to offer it. For additional premium, some underwriters will agree to add a sublimit (usually $250k) which will cover only the defense costs related to this dispute. The actual unpaid wages will usually have to be paid for by the insured if judgment is rendered against them.
 
IRCA
Some policies will amend the definition of Claim to have it include Immigration Reform and Control Act of 1986 (IRCA) violation notices. If a company is suspected of harboring or employing illegal aliens/undocumented workers, this coverage extension would provide a sublimit that would usually cover only the defense costs required to address the claim.
 
Defense costs outside the limit
Legal fees and other costs/expenses are usually treated the same as judgments or settlements in that any dollar paid out by the carrier will reduce the limit of liability available to the insured. With a policy that offers defense costs outside the limit, a separate, standalone limit is established that is dedicated only to defense costs. This leaves the full primary limit available to pay for any judgments/settlements rendered against the company.
 
Employee privacy breach
Some carriers are willing to offer a form of cyber coverage as a small limit within the EPLI policy. This would pay some of the costs required to respond to a data breach where employees’ personally identifiable information is stolen.

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11/25/2024