EPLI Insurance: Employers Need to Act to Avoid Getting “Stuck” Without Preferred Attorney
An increasing number of organizations carry employment practices liability insurance (“EPLI”), to provide coverage for certain types of employment-related claims, including discrimination and wrongful termination claims. Since many such employers have never (or not recently) submitted a claim for coverage, they are often surprised to find that their options for legal representation under the policy are very limited. Nearly all EPLI insurers require their insured customers to select from a small group of “approved” counsel. Each EPLI insurer uses different methods for determining which attorneys are “approved” to be retained by policyholders for covered claims.
The common consequence in such scenarios: the employer’s long-time or preferred employment attorney is not on the approved panel of counsel. When a covered claim occurs, the employer must work with the EPLI carrier’s assigned attorney, whom the employer has usually never met and who knows very little, if anything, about the employer or its workforce.
Getting Your Attorney Approved: The Sooner You Act, The Better
After an employment claim arrives in the form of a filed complaint or threat letter, it is typically difficult for the insured employer to persuade the EPLI insurer to allow the employer’s preferred counsel to handle the matter. Rather, an employer with EPLI coverage is much more likely to get agreement from their EPLI carrier if they ask during the annual policy renewal process and/or when the employer is switching EPLI carriers. We strongly advise employers with EPLI coverage to contact their liability insurance broker and express their desire to have particular employment law attorneys approved – whether via an endorsement in the middle of a policy year, upon policy renewal or when changing EPLI carriers.
Clark & Gotzler attorneys have been approved by many EPLI carriers, but it can take time to complete the process, so if your organization wants to have our firm or attorneys specifically added, you should reach out to your broker before a claim arrives. If you or your insurance broker have any questions, please feel free to contact us.