Employment Practices Liability Insurance Frequently Asked Questions
Questions About our Coverage:
Is Third Party Coverage provided?
Third Party Coverage responding to claims brought by non-employee customers or vendors is available on an optional basis for an additional premium.
Is there "prior acts" coverage?
For the portfolio coverage, the inception date is the retro date because we assume most insureds seeking the lower portfolio limits will be first time buyers. Insureds who have current and continuous Employment Practices Liability Insurance (EPLI) coverage with another carrier may request a backdated retro date. Requests of three years or less require a signed warranty statement. For requests of more than three years, the account must be referred using the referral application.
Does coverage include "Extended Reporting Period"?
Yes, the option to purchase a one-year ERP is included in our coverage. In most states it is available for 100% of the EPLI premium. Some states have different extended reporting periods and pricing.
Are "Defense Costs" inside the limit or outside"?
Inside the limit. This means that the limit may be eroded by both defense costs and indemnity payments.
Is this" claims made" coverage?
Yes it is. EPLI coverage is written on a claims-made and reported basis. This means that a claim must be made against the Insured and reported to The Hanover Group within the policy period (or within a subsequent renewal period assuming there has been continuous coverage.) The "wrongful act" must occur after the effective date of the first EPLI policy written by the insurance company.
Are allegations by applicants for employment covered?
Allegations brought by applicants for employment will trigger the coverage.
Does the EPLI cover a suit made against a board member?
Under our EPLI coverages, executive officers and directors are Insureds but only for the conduct of the Insured's business and within the scope of their employment or their duties as executive officers or directors.
Are there options besides the $100,000 limit to purchase less or more?
Yes, a number of portfolio limit options from $25,000-$250,000 are available with various deductible options to choose from, depending on the limit. The Hanover Group also offers referral limits (subject to the EPLI Referral Application) of $500,000 and $1,000,000.
How is the deductible applied?
Assuming a $5,000 deductible, the insured will be billed for the first $5,000 of covered loss. Above the deductible amount, The Hanover Group would pay additional coverage loss within the limit of liability.
Are there any deductible options available?
Depending on the limit, there is a range of deductible options, from as low as $5,000 for smaller limits to $25,000 for the larger limits.
How does your EPLI policy respond when the Insured has EPLI coverage elsewhere?
The Hanover's EPLI policy would be primary per the coverage wording.
Can I get coverage for more than 50 employees?
Yes, note that EPLI coverage is available for insureds with 51-250 employees through the Referral Process and subject to the EPLI Referral Application.
Are undocumented employees covered?
It depends on the situation. The insurance company's definition of "employee" states "employee" means an individual whose labor or service is engaged by and directed by "you" for remuneration. We do not address whether they are documented or not. If an insured is treating someone as an employee (paying them on a W-2, providing benefits if required, etc.), it is possible that coverage may be provided. The individual circumstances would be reviewed and it is likely that the jurisdiction's prior precedent on this issue would impact coverage.
Can I get EPLI on any class of business?
No. The following classes are not eligible for the EPLI program: law firms, employee leasing firms, temporary help firms, private membership golf clubs, schools, instructing or training institutions of any type, libraries, municipalities and other government type entities, political groups or organizations, labor unions and the like.
What if I have to take time off from work because of a claim?
Will I be reimbursed? The Hanover Insurance Group will pay all reasonable costs we ask the Insured to incur while helping us investigate or defend a "claim" or "suit". This includes no more than $100 per day for earnings lost by the Insured because of time taken off from work.
How does The Hanover Insurance Group's EPLI premium compare to what is available in the market place?
Based on the limit of $100,000 and default deductible of $5,000, the price is $56.00 per employee. For an account with 5 employees the premium would be $280 and for an account with 8 employees, the premium would be $448. Stand-alone monline policies, which make up roughly 95% of the EPLI policies sold in the marketplace, can cost easily $2,000 and up.
How is pricing determined based on number of employees?
Employees other than full-time employees should be counted as one alf an employee. Owners, directors and officers should be counted as employees if they are involved in the day-to-day operations. Insureds with employee counts of 51-250 employees are subject to the Referral Application and should be sent to your Underwriter for review.
Processing & Referral
What type of accounts need to be referred?
The type of accounts that are subject to the referral process include: (1) Insureds with employees between 31-250, or (2) any insured seeking limits of $500,000 or $1,000,000, or (3) any insured who has current and continuous EPLI coverage and is seeking a backdated retro date of more than 3 years prior to the EPLI coverage effective date.
If referred and approved the first year, are subsequent approvals needed?
If the insured continues to fall in the catagory of 51-250 employees, or coninues to need more than a $25,000 limit, then the account will remain a referral and be reviewed each year.
Is there a form we need to fill out for a referral?
Yes, there is a Referral Application.
How quickly will referral quotes be provided?
It is the goal to turnaround a referral within 24 hours. However, during certain peak seasons (before 1/1, etc.), turnaround time may extend beyond this. Turnaround is based on having all the appropriate quote information completed in the supplemental application.
Can coverage be added mid-term on renewals?
Yes, it can.