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EPLI/D&O/Fiduciary Liability Insurance At Work for Your Business

The rise of discrimination disputes in the aftermath of the #MeToo movement, employee litigation for wrongful termination or harassment, and lawsuits over unfair business practices have increased the risks faced by businesses, management, and directors and officers.  A proactive approach to management liability coverage that includes Employment Practices Liability Insurance (EPLI), Directors & Officers (D&O) and Fiduciary Liability can help ensure that companies and management are adequately protected from ever-changing risks and new exposures. 

With our experience and expertise, Arroyo is well positioned to put into place a comprehensive management liability insurance program to protect you today and tomorrow.

Inside Employment Practices Liability

The past two years saw new allegations of sexual harassment or assault against a media mogul, political figure, comedian, actor, sports figure, and news broadcaster. These claims occur daily at “main-street” businesses as well – it’s not exclusive to the Fortune 500. Often these allegations lead to the termination of the alleged perpetrator’s employment, but they also may lead to legal action against the companies that harbor such individuals.

To protect your business, EPLI coverage will step in and respond to allegations made by individuals claiming discrimination, harassment, wrongful dismissal, and retaliation. It will provide your business with defense costs and indemnification for settlements or judgments up to the policy limit.  Even if you do everything right to follow best practices, this doesn’t stop employees from filing lawsuits. And the cost of defending against those claims and paying them can be very expensive without EPLI. The average cost for defending and settling employment law cases is $160,000. While not always available in marketplace, the best policies will provide Wage & Hour Defense Costs as well.

Along with Employment Practices Liability insurance, it’s important to also carry D&O coverage in the event your company faces a lawsuit that it permitted and fostered a culture that was conducive to such wrongful conduct. Often D&O and EPLI insurance are provided in conjunction and dovetail to provide comprehensive coverage for the company and its directors and officers.

Inside Directors & Officers Liability

D&O insurance covers directors and officers for claims made against them while serving on a board of directors and/or as an officer. The policy can be written to cover the directors and officers of for-profit businesses, privately held firms, non-profit organizations, and educational institutions. This policy basically covers claims resulting from managerial decisions that have adverse financial consequences. It covers the personal liability of company directors but also the reimbursement of the insured company, in case it has paid the claim of a third party on behalf of its managers in order to protect them. Coverage is usually available for current, future and past directors and officers of a company and its subsidiaries.

Inside Fiduciary Liability

The frequency of expensive and time-consuming litigation and regulatory efforts in today’s evolving legal environment has given rise to employers and plan fiduciaries increasingly being held accountable for their actions (or failure to act) when it comes to employee benefit plans – making Fiduciary Liability insurance an integral part of a strong risk management program. The policy is designed to protect individuals against liability for managing or administering an employee benefit plan – from top corporate executives that hire investment managers to payroll clerks that process enrollment forms. It protects plan fiduciaries against claims alleging that they mismanaged an employee benefit plan or plan assets. This includes, but is not limited to, making bad investment decisions, negligently handling plan records, and negligently selecting plan service providers.

There is nothing standard about any of these policies, so it’s important to know what’s covered under each (and what isn’t). The Arroyo staff will go over your options in detail and review how to best proceed to tailor policies to fit your needs.