Posts Tagged ‘Employment Practices Liability Insurance’

The Client Wants to be Named on Your Policy

April 12, 2012

Kelan J. Vorbach, CIC
Professional Liability
Program Manger,
John B. Wright Insurance

If a client asks to be named additional insured on your firm’s professional liability policy, don’t just say okay and have the office manager call your agent.   Making a client an additional insured allows the carrier to invoke the insured versus insured exclusion. The following policy wording is typical:

 

EXCLUSIONS

This insurance does not apply to claims:

4. Made by one insured under this policy against another insured under this policy.

 

The additional insured endorsement is normally used to make an over contractor an insured on a subcontractor’s policy, to protect the over contractor from claims made by third parties, where the over contractor may have vicarious liability for the subcontractor’s negligence. In the attorney client relationship, the client (rather than a third party) is by far the most likely claimant. Further, most clients are not attorneys so they have no professional liability exposure. The additional insured endorsement serves only to exclude coverage for the most likely claimant, the client.

 

Each situation is different. If you have specific questions contact your agent or give me a call.

Kelan J. Vorbach, CIC is the Professional Liability Program Manager with John B. Wright Insurance. You can check him out at http://www.LawFirmInsuranceExpert.com. For a consultation call 732-223-6611 ext. 108.

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Now What Do We Do?

April 5, 2012

Kelan J. Vorbach, CIC
Professional Liability
Program Manger,
John B. Wright Insurance

This call came in from the office manager. The partners wanted to ignore the issue but the office manager thought I might be able to help.
The problem was a new hire. It was a key non-professional role in their busy office. The first time they thought it was a fluke. One day, the new employee didn’t show up and didn’t call in. When the employee arrived the next day, the explanation given was personal reasons. Management reviewed the policy on calling in with the new employee and assumed that was the end of it.
A few weeks later it happened again, no phone call and the employee was unreachable by phone. The firm left messages. The new employee responded by text message, again citing personal reasons but this time claiming he felt intimidated by one of the partners. The intimidation claim concerned the partners enough that they were just going to let it go and not do anything. Fortunately the firm had an Employment Practices Liability Insurance (EPLI) policy. In addition to covering employee claims of discrimination and harassment (including sexual harassment) the EPLI policy provides management tools and a toll free help line. A single call to the help line solved the problem. The firm was connected to an experienced employment law attorney who reviewed the facts of the case, including information regarding age, health, gender, orientation and ethnicity. By the time they completed that call they had the confidence to immediately fire the bad employee, knowing there was no reasonable basis for a claim.
While EPLI is an insurance product designed to pay employment practices claims and defense costs, the toll free confidential support is the most frequently used policy feature. The carrier benefits by assisting the firm in claim avoidance and risk reduction. The firm benefits from the management support they receive.
As a class, insurance carriers consider law firms a fairly high risk for EPLI claims. Therefore EPLI coverage for law firms is generally available only as a stand alone policy or as part of a management liability policy. If your firm does not carry Employment Practices Liability Insurance, I urge you to consider it. For more information contact your agent or give me a call.

Kelan J. Vorbach, CIC is the Professional Liability Program Manager with John B. Wright Insurance. You can check him out at http://www.LawFirmInsuranceExpert.com. For a consultation call 732-223-6611 ext. 108.