Employment Related Lawsuits - Is Your Firm Protected?


In 2014 OAMIC’s lawyers professional liability (LPL) policy was enhanced with the ability to add employment practices liability (EPL) to the coverage.  Law firm partners, managers, and legal administrators know the importance of addressing “risk”, but EPL is often forgotten or not understood.  Even worse, the biggest mistake in risk management occurs by adopting the belief that it surely can’t happen to us.  After all, claims only happen to other folks, right?

The most common question we receive from insured lawyers or firms is, “what does it cover”?  EPL includes a fairly broad array of exposures arising from the employment process.  Most common among these are:  Discrimination, Failure to Promote, Wrongful Termination, Harassment, Disability Rights, etc.  A great feature in the EPL coverage offered by OAMIC is that it applies to third parties, i.e. clients, as well as employees.  This is important because claims by clients alleging discrimination or harassment would probably fall outside the purview of coverage under LPL. 

During the course of operating a business/firm, there are many employment decisions relating to hiring, firing, promotion, demotion, etc.  Even though most all of these are undertaken and handled appropriately, the employee or former employee may have a different perspective.  Accordingly, the defense of any allegations for wrongful employment action is critical and certainly has value.

The standard EPL limit of liability offered is 100/300 (100,000 per claim & 300,000 aggregate).  Higher limits are available and can be requested.  If the insured firm consults with an employment lawyer who is approved by us prior to terminating or demoting an employee, the standard $5000 deductible will be reduced by 50%, as long as the advice received is followed. Remember, EPL is written on a claims-made basis as is LPL, so do not put off getting coverage in place.  The coverage will only apply if coverage existed at the time of the incident triggering the claim and at the time when the claim is first made or reported.

Don’t hesitate to contact us for further information, or if questions arise.