As if the past few years haven’t been challenging enough economically, we have seen an ever increasing number of Employment Practice Liability Claims. EPL or EPLI, as it’s commonly called, is the liability coverage that protects you from various employment discrimination charges from employees and former employees and 3rd Party Discrimination Claims.
In the past few weeks I’ve discovered a couple of misconceptions about EPL coverage. At a recent meeting with other business leaders (not hoteliers), all but one thought these claims would be covered by their regular commercial general liability insurance. These types of claims are definitely NOT covered; in fact they are specifically excluded from the general liability policy.
A second misconception has to do with claims and claim reporting. Almost ALL policies have a strict reporting condition in the policy. The policy is actually a contract between you and the insurance company. The company, by contract, agrees to do certain things on your behalf in the event of a claim.
In the same way, you agree to do certain things in the event of a claim. These conditions and requirements are listed in the policy. Each company and policy may vary slightly in what they require so it is important to be familiar with your policy conditions and procedures should a claim occur.
We have had some questions on what constitutes a claim. Should you report a potential claim when you get that nice letter from the EEOC or a request from the US Department of Justice to respond to a complaint?
Maybe you know the claim is unfounded and you answer the request without notifying the company. You hear no more from the DOJ, Civil Rights commission, but a year later you get served a summons for civil action against your hotel.
If you did not notify the company when you got the initial DOJ request/complaint, the company can deny your claim for failure to report in a timely manner.
Be safe, report all claims as soon as you have knowledge of a potential claim. It’s better to be safe than sorry in our litigious society.