1. PAMIC Underwriting & Loss Prevention Seminar
Employment Practices Liability & Personal Lines Cyber Liability
David Richardson
November 9, 2017

2. Agenda Employment Practices Liability Coverage Market Underwriting
Claims
Risk Management
Hot Topics
Personal Lines Cyber Liability
Cyber Evolution
The Risk
Coverage
Marketplace
Service Offerings

3. What are we covering?
EPL provides coverage for claims made against a company by their employees, former employees, applicants (and third party’s) for issues related to their employment.
1st party coverage – claims arising from a wrongful employment related act allegedly committed by insureds, employees and volunteers performing operations on the insured’s behalf.
3rd party coverage - claims arising from alleged discrimination or sexual harassment committed by insureds against customers, clients or vendors.

4. What are we covering? Who is Covered? Directors/Officers Owner
Employees
Temporary Help
Volunteers
Independent Contractors
Who can bring Claims?
Employees
Applicants
3rd Parties
EEOC
Directors

5. Marketplace ~ 55 standalone EPL carriers + BOP/CGL enhancements
$2.1 billion in GWP
Very mature market – limited differentiators
Continued claim pressure from EEOC, unemployment, rising costs
Emerging Threats / Hot Topics

6. The Policy Duty to Defend Indemnification Claims made and reported
Right to Settle (Hammer Clause)
Retro Dates
Exclusions

7. Underwriting Considerations
Rating – per employee
US vs Foreign
Full Time vs Part Time
Top 5 states
Turnover
Compensation
Controls
Loss History
Financial Condition
Smaller Insureds are better?

8. Underwriting Considerations
Bad Classes
Auto dealerships
Casinos
Educational services -- Schools, Colleges and Universities
Employment Agencies & Employee Leasing
Political Organizations, Federal, State & Local Governmental Services or Agencies
Healthcare and Residential Care Facilities;
Law Offices or Legal Services, Security Brokers
Membership Recreation Clubs - Golf, Tennis, Fitness & Country Clubs
Real Estate Offices or Agents for Wrongful 3rd Party Acts Coverage
Bad States – AL, CA, DC, FL, IL, NJ, NY, & TX

9. Common Claims Wrongful Termination Breach of Employment Contract
Discrimination
Harassment
Failure to Employ/Promote
Wrongful Discipline or Demotion
Invasion of Privacy
Defamation or Employment Related Slander
Retaliation

10. Equal Employment Opportunity Commission
The EEOC is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee

11. Protections – Federal Statutes
The Fair Labor Standards Act (FLSA) of 1938
The Equal Pay Act of 1963
Title VII of the Civil Rights Act of 1964
Age Discrimination in Employment Act (ADEA) of 1967
The Pregnancy Discrimination Act (PDA) of 1978
Migrant & Seasonal Agricultural Worker Protection Act of (amended in 1986)
The Worker Adjustment and Retraining Notification (WARN) Act of 1988
The American with Disabilities Act (ADA) of 1990
The Family and Medical Leave Act (FMLA) of 1993
The Uniformed Services Employment and Reemployment Rights Act (USERRA) of 1994
The Genetic Information Nondiscrimination Act (GINA) of 2008

12. Protections – State & Local
Fair Employment Practices Laws -- employment discrimination statutes
every state has one
generally broader than the corresponding federal statutes
remedies can be more generous
tend to present more exposure to smaller insureds
Whistle-blower Statutes -- similar to federal statute -- protects employees from retaliatory actions by their employer when employees report violations of any law on the part of the employer
Public Policy Protection -- common law remedies that protect employees from retaliation for exercising their lawful rights (i.e. right to file a workers’ compensation claim, right to be involved in labor actions); typically an exception to state employment at-will doctrines
Administrative Procedures
procedures enforced by state agency for resolving employment related violations
if filed in conjunction with an EEOC charge; EEOC typically defers matter to the state agency for investigation and adjudication
once “probable cause” is determined, matter is reviewed via a hearing
administrative law judges award damages in many states

13. Risk Management
Varies according to program provider but generally includes:
On-line risk management services providing services normally provided by a Human Resource Department including:
templates for employee handbooks,
employment related policies,
applications,
Legal hotline providing employment related consultations or legal advice

14. Hot Topics Very Active EEOC Wage and Hour Equal Pay Act
Americans with Disabilities Act
Immigration

15. PERSONAL LINES CYBER LIABILITY

18. CYBER EVOLUTION
Bad Guys using same tricks and scams (phishing, ransomware)
Commercial moved from Data Breach to full Cyber Suites
Personal lines moving from ID Theft to Family Cyber
Insurers have been a key solution for insureds
Aware, Responsive, Flexible Solutions
Connected like never before; more connections, more vulnerabilities
What’s top of mind now with many?
Fire, Quake, Coverage C Limits or……
Hacking, Virus, Loss of Data or System, Cyber Bullying!
What’s Next?
More Service? More Indemnification?

19. THE RISK IS REAL!

20. THE RISK IS REAL!

21. THE RISK IS REAL!

22. Coverage Extortion Data Replacement and System Restoration
Social Engineering (Fraud)
Identity Theft
Cyber Bullying
Breach Notification Costs
Internet Clean Up
Legal Expense Reimbursement

23. Marketplace 3 to 5 carriers Segmentation
Mass Market, Mass Affluent, HNW
Underwriting the risk – How? Bad states? Demographics?

24. Service Offerings Educational alerts, tips and trends
Identity Theft Remediation
Breach Notification Support
Extortion SME’s
Tech Support

25. Contact Information
Thank you!
David Richardson
Senior Vice President
Berkley Re Solutions a Berkley Company
3 Stamford Plaza, 9th Floor
301 Tresser Blvd
Stamford, CT 06901
Office:
Mobile: