By Larry France
In a recent U.S. Supreme Court decision, the justices ruled (five to four) that employees who have arbitration clauses in their employment contract can be barred from suing for most civil rights, harassment and other employment claims. The case in question is a claim filed by a Circuit City employee who sued for sexual harassment but who also had signed an arbitration agreement. Prior to this ruling the legal profession interpreted the Federal Arbitration Act of 1925 to exclude workplace disputes. How will this affect underwriting and pricing of future EPLI risks?
Doug Farber of CoverX, a program administrator located in Southfield, Michigan, views the ruling as a well reasoned decision "that will benefit both employees and employers by providing access to a less confrontational, less formal, and less costly forum that affords a speedier resolution to employment disputes." Farber further comments, "While employees, and organized labor in general, may be concerned that arbitrators render more conservative awards, historical arbitration data leads me to believe that as in other disputes currently subject to binding arbitration, employees will receive some monetary award in a higher percentage than disputes brought to a court." Farber believes that well-drafted agreements provide mechanisms that allow all parties to participate in an equitable selection of non-biased, well-qualified arbitrators.
Farber feels it is too early to know what impact this decision will have on pricing and retention levels. "While well-crafted arbitration agreements are looked upon favorably by underwriting, they are but one of many considerations in determining both premium and retention levels."
Farber states that there will certainly be further litigation on this issue. "It will be very interesting how this all plays out over the coming months and years."
This U. S. Supreme Court decision falls on the heels of another ruling that says employers have vicarious liability, even if they were not aware of the infractions or if discriminating threats were not acted upon.
Among the coverages found in most EPLI policies, two that may soon take the spotlight-because of the corporate downsizing taking place today-are Wrongful Termination and Breach of Employment Contract. Whether or not there is "fault" on the part of the employer, defense costs can diminish policy limits quickly.
The Age Discrimination In Employment Act (ADEA) bars discrimination against persons aged 40 years or older. It applies to companies with 20 or more employees. It is a safe wager that many individuals receiving "pink slips" will fall into that category. Claim count will certainly escalate--not only in EPLI but you can be sure that workers compensation activity will also follow suit. Then the workers compensation situation is a whole other article.
According to Jury Verdict Research of Hatsboro, Pennsylvania, jury-awarded median for employment practices liability cases, which included discrimination and retaliation, rose 12% in one year, from $178,000 in 1998 to $200,000 in 1999. The plaintiff recovery rates for EPLI went from 59% in 1993 to 71% for the year 1999, a 20% increase. Jury Verdict Research maintains the only nationwide database of more than 176,000 plaintiff and defense verdicts, and settlements resulting from personal injury claims.
It will be interesting to see how the market addresses the more difficult-to-place classes, such as medical, legal governmental, and hotel/motel risks to name a few. Along with most types of accounts today, EPLI has felt a tightening in pricing, product, and underwriting. Some carriers are also enacting higher retention levels.
"To bundle or not to bundle?" That is a good question. As higher awards are being given out, clients or risk managers will have to assess the pros and cons of placing stand-alone EPLI. As with other policies--such as special events, auto, and workers compensation--the possibility of exhausting limits, even if only through defense costs, is a major concern when looking at the client's overall insurance program. Each situation will need to be evaluated on an individual basis.
Another very important issue is training and communication. The business must have an employee manual stating what is expected of employees, and also disclosing the company's stand on the issues. Several markets will provide some legal assistance regarding wording of policies. Communicating to all levels of employees not only sets a level playing field but emphasizes to employees the importance which the employer places on adhering to the policies.
If your client has employees who work internationally, the EPLI policy must contain worldwide coverage. Even though employees sent abroad are U S. citizens, their employers are subject to the laws of that country. U.S. policies are, for the most part, more comprehensive than those of other countries where different exposures may exist.
Jury Verdict Research can be contacted at (800) 341-7874, Ext. 307 or by e-mail at custserve@lrp.com.
The following have indicated that they are a market for EPLI coverage. Some markets will consider most risks while others entertain a more specific focus. Note the states or territories each operates in when making contact.
Affinity Insurance Services, Inc.
710 E. Ogden Ave., Ste. 430
Naperville, IL 60563
Contact: James Knapp
Phone: (800) 677-0929
An MGA/E&S broker operating in IL only, offering limits of $5 million/$5 million and targeting lawyers. The carrier, Virginia Surety, has a rating of excellent.
Angel/London Special Risks, Ltd.
110 Fenchurch St.
London, EC3M 5JT, UK
Contact: Susan Monnickendam
Phone: (011) 44 20 7459 9219
Fax: (011) 44 20 7488 0330/0770
E-mail: susan@lsr-angel.com
Web site: www.lsr-angel.com
An MGA operating in all states and offering limits of $10 million. Target markets are all sizes of public and private companies/corporations in all industry sectors. Other coverages are defense costs outside the limit, duty to defend, insured's choice of defense council, third-party for discrimination and harassment. A rated Hudson Insurance Company is the admitted carrier in CA, CO, IL and NV. All other states except MA, ME, MI, NH, RI, VT, Puerto Rico and W. Virgin Islands are underwritten by eligible surplus lines insurers in the London market (A rated).
Apex Insurance
301 Concourse Blvd., Ste. 100
Glen Allen, VA 23059
Contact: Karl Shearer
Phone: (800) 366-1213
Web site: apexinsurance.com
An MGA/E&S broker operating in all 50 states and offering limits of $25 million. Public officials, law enforcement and school board legal liability are also offered. The A++ rated carrier is General Star.
Arlington/Roe & Company, Inc.
8465 Keystone Crossing
Indianapolis, IN 46240
Contact: Ronni Swift, Anita Jones, Diana Fenter
Phone: (800) 878-9891
Fax: (317) 259-4016
E-mail: info@arlingtonroe.com
Web site: arlingtonroe.com
An MGA/E&S broker operating in all 50 states, offering limits of $250,000 to $5 million. Will consider most classes. D&O, E&O and fiduciary is also available. Only A rated and above carriers are used.
Atlantic Specialty Lines, Inc.
P.O. Box 35723
Richmond, VA 23235
Contact: Greg Provenzo, Seth Johnson, Harper West
Phone: (800) 368-2095
Fax: (804) 320-7280
Web site: www.atlanticspecial.com
An E&S broker operating in VA and states contiguous to it. Limits are $1 million/$1 million, $3 million/$3 million or higher as needed. Target markets are restaurants, mercantile, professionals and small business. Related coverages considered are not-for-profit, D&O and miscellaneous E&O. All carriers are A rated or better.
Bailey Special Risks, Inc.
P.O. Box 768
Hendersonville, TN 37077
Contact: Jim Edwards, Kelly Pewitt
Phone: (800) 768-8475
Web site: www.baileyrisks.com
An MGA/E&S broker operating in all 50 states and offering limits of up to $50 million. All classes are considered. Related coverages offered are workplace violence, tenant discrimination and ADA liability. A rated or higher carriers are used.
Black/White Concord Ins. Brokerage, Inc.
135 Kinnelon Rd., Ste. 102
Kinnelon, NJ 07405
Contact: Michele Raoul
Phone: (800) 257-0723
Fax: (800) 257-6719
E-mail: micheler@bwins.com
Web site: www.concordins.com
An MGA wholesaler/E&S broker operating in all states and offering limits up to $10 million. All classes are considered. Third-party discrimination, cost in addition, prior acts, and punitive damages also are offered. Carriers are Evanston, GenStar, Markel, USF&G and U.S. Liability.
Bohrer, Croxdale & McAdoo, Inc.
P.O. Box 2760
Springfield, MO 65801
Contact: Vicki Cota (MO, KS, IL, OK)
Phone: (800) 779-2550
Fax: (888) 869-2550
E-mail: vcota@bcmins.com
P.O. Box 1190
Conway, AR 72033
Contact: Clay Farris (AR)
Phone: (800) 594-5101
Fax: (800) 726-7707
E-mail: cfarrisbcm@conwaycorp.net
Web site: www.bcmins.com
An E&S broker operating in AR, IL, KS, MO and OK with limits of $100,000 to $5 million. Any classes are considered regardless of size. Third-party discrimination is available on some risks. Various A rated admitted and non-admitted carriers are used.
Russell Bond & Co., Inc.
295 Main St., Ste. 866
Buffalo, NY 14203
Contact: Tonya Holleoerer, RPLU, (ext. 133); Tony Ambrose, ASLI, RPLU, (ext. 143
Phone: (800) 333-7226
Fax: (716) 856-0403
E-mail: info@russellbond.com
Web site: www.russellbond.com
An MGA/E&S broker operating in New York and surrounding states, offering limits of $100,000 to $10 million. All risks are considered. Coverage is written monoline or in conjunction with E&O, school board legal, and public officials. All 20 carriers available are rated A- or better.
R.J. Bostick & Associates, Inc.
38029 Third St.
Willoughby, OH 44094
Contact: Jana L. Miozzi
Phone: (440) 942-2626
Fax: (440) 942-3363
E-mail: jmiozzi@rjbostick.com
An E&S broker operating in various states with various limits available. D&O and E&O are also offered. Carriers are Executive Risk, Markel American, St. Paul, plus Underwriters at Lloyd's.
Burns & Wilcox, Ltd.
30833 Northwestern Hwy., Ste. 220
Farmington Hills, MI 48334
Contact: Call 800 number for local branch
Phone: (800) 521-1918
An MGA/E&S broker operating in all states except AK, HI, MA, ME, NJ and NY. Will consider all classes. D&O (including EPLI) and GL (including EPLI) are also offered. Various A rated carriers are used.
Centurion Corporation
P.O. Box 959
Hanover, NH 03755
Contact: Tom Canfield
Phone: (800) 258-3056
Fax: (603) 643-2740
E-mail: tom@centcorp.com
Web site: www.centcorp.com
An E&S broker operating in all states. Limits are negotiable. Carriers are Fireman's Fund, Chubb/ERMA, and AIG.
Continental Agency of CT
P.O. Box 187109
Hamden, CT 06518
Contact: Gerard Prast
Phone: (800) 922-2563
Fax: (203) 288-2312
Web site: ca-group.com
An MGA/E&S broker operating in all of the New England states. Limits are $250,000 to $5 million. Most classes are considered. No intentional acts exclusion, optional third-party discrimination, defense outside policy limits or punitive damage coverages. Carriers include USLI, Pacific Insurance, Evanston and Underwriters at Lloyd's.
Continental/Marmorstein & Malone
P.O. Box 586
Paramus, NJ 07652
Contact: Bill Malone
Phone: (800) 932-0249
Fax: (201) 261-8922
E-mail: bmalone@ca-group.com
Web site: ca-group.com
An MGA/E&S broker operating in NJ and NY with limits of $5 million each claim/$5 million aggregate. All classes are considered. D&O also is offered. Carriers are Chubb, Essex, FirstState, Guilford Specialty, Jefferson, Lloyd's, Tudor and U.S. Liability.
Crump Insurance Services, Inc.
7557 Rambler Rd., Ste. 350
Dallas, TX 57231
Contact: Sharon Ward
Phone: (800) 888-7126
Fax: (214) 265-2683
Web site: www.Crumpins.com
An MGA/E&S broker operating in all states with limits up to $5 million. All industries are considered with E&O (including EPL) also offered. Various A rated carriers are used.
Frederick John Fisher Insurance
P.O. Box 452690
9100 S. Sepulveda, Ste. 121
Los Angeles, CA 90045
Contact: Fred Fisher
Phone: (310) 665-1106
E-mail: ffisher@icnt.net
Web site: e-o.com
An MGA/E&S broker operating in the western region of the United States and offering limits of $5 million. All classes are considered. Third-party discrimination, D&O and E&O are also offered. Lloyd's is the A rated carrier.
Gateway Underwriters Agency
755 S. New Ballas Rd., Ste. 130
St. Louis, MO 63141
Contact: Barbara Smeltz
Phone: (800) 325-7652
Fax: (314) 567-4552
E-mail: Barb.Smeltz@gua-stl.com
A general agency operating in IA, IL, KS, MO and NE with limits up to $10 million. Target markets are manufacturing, sales and social service--up to 200 employees. No general contractors or hospitals but will consider lawyers. Carriers are American Equity, Burlington, Tudor and USLI, all A+ rated or above.
Gulf Insurance Company
125 Broad Street
New York, NY 10004
Contact: William H. Corney
Phone: (212) 291-3071
Fax: (212) 291-3017
E-mail: Wcorney@gulfins.com
Web site: www.gulfinsurance.com
An insurer operating in all states with limits up to $25 million. Target market is companies with 1,000 employees or more. No class is specifically excluded. Gulf is an A rated carrier.
Hartford Financial Products
1 World Trade Center
New York, NY 10048
Contact: Christine Schneider, James Delauro
Phone: (212) 277-0400
E-mail: christine.schneide@thehartford.comJames.delauro@thehartford.com
Web site: www.hfpinsurance.com
An insurer operating in all states and offering limits of $25 million. Target markets are financial institutions, manufacturing, retail stores, hospitality, high-tech, real estate, and transportation risk. Classes not written are law firms, auto dealers and schools. Private choice-full entity EPL/D&O policy for privately held companies. Carriers are Twin City Fire Insurance and Nutmeg Insurance, both A+ rated.
Insurance Innovators Group
P.O. Drawer 969
Glenside, PA 19038
Contact: Cheryl Tamasitis, Janet Barton, Fran Reh
Phone: (800) 523-6422
Fax: (215) 886-2482
E-mail: info@iiigroup.com
Web site: www.iiigroup.com
An MGA that operates in CT, DE, MA, MD, NJ, NY and PA with limits of up to $5 million. All classes are considered. Also offered are for-profit and nonprofit D&O. All carriers are A rated or better.
Izzo Ins. Services, Inc.
7234 W. North Ave.
Elmwood Park, IL 60707
Contact: Sam VanCleave
Phone: (800) 800-1704
Fax: (708) 452-1777
Web site: www.izzoinsurance.com
An MGA that operates in 40 states. Limits are $500,000 per occurrence/$500,000 aggregate and $1 million per occurrence/$1 million aggregate. All classes are considered. Workers compensation also offered. The Dodson Group is a B++ carrier.
Jimcor Agencies
15 Ver Valen St.
Closter, NJ 07624
Contact: Coryn Mastowski
Phone: (800) 334-0474
Web site: jimcor.com
An MGA/E&S wholesaler operating in most states and offering limits of up to $25 million primary. Most classes are considered. D&O, employee benefits, workers comp and fiduciary GL also are offered. A rated carriers are utilized to place coverage.
Katie Freeman Insurance Services
P.O. Box 500380
San Diego, CA 92150
Contact: Evon Rios, Bonnie Ray
Phone: (858) 676-1744
Fax: (858) 676-1740
A wholesale, surplus line broker operating in CA and targeting E&O, D&O, medical malpractice and BOPs. Multiple carriers are utilized.
H.R. Keller & Co., Inc.
1520 Sheridan Dr.
Buffalo, NY 14217
Contact: Rob Martin, John Barton
Phone: (800) 424-2202
E-mail: Rmartin@Kellerandco.com
A general agent/wholesaler operating in NY. Limits vary by company. All classes are considered with E&O and D&O also written. All carriers are rated A+.
M.J. Kelly Co., Inc.
4415 E. Sunshine
Springfield, MO 65809
Contact: Lori Drake
Phone: (800) 725-7211
Fax: (417) 883-7103
E-mail: Ldrake@mjKelly.com
Web site: www.mjKelly.com
An E&S broker operating in AR, IA, IL, KS, MO, KS and TN and offering limits of $1 million. Target markets are varied; D&O also offered. Various carriers are utilized to place coverage.
G.A. Mavon & Co.
10 W. Chicago Ave.
Hinsdale, IL 60521
Contact: Jim Skelton
Phone: (630) 655-2400
Fax: (630) 654-4447
E-mail: jims@mavon.com
An MGA/E&S broker operating in IL and IN. Various limits are offered. Target market is companies with 200 or fewer employees; D&O also is offered. Carriers are Evanston and U.S. Liability, rated A and A++ respectively.
Michael A. Orlando
North Island Facilities, Ltd./ NIF Pro
30 Park Ave.
Manhasset, NY 11030
Contact: David L. Vicari, Senior VP; Deborah Rivera
Phone: (800) 664-3776
Fax: (516) 365-9566
E-mail: dvicari@nifgroup.com Drivera@nifgroup.com
A professional intermediary operating in all states except AK or HI. Limits offered up to $250 million. All classes are considered. Other coverages offered are third-party discrimination, D&O including EPLI, full prior acts, and defense outside the limits of liability and spousal coverage. All carriers rated A or above.
Philadelphia Insurance Companies
One Bala Plaza, Ste. 100
Bala Cynwyd, PA 19004
Contact: Mike Thomas
Phone: (800) 759-4961
Fax: (610) 617-7940
Web site: www.phlyins.com
A P&C insurance company operating in all states except AK and LA offering limits up to $10 million. Most classes are considered with full entity and wrongful act coverage offered. Philadelphia Insurance Companies is rated A+.
Prime Insurance Syndicate, Inc./I.E.B.S.
311 S. Wacker Drive, #3360
Chicago, IL 60606
Contact: Rick Lindsey
Phone: (800) 456-4576
Web site: Primeis.com
An MGA/insurer that operates in all states. All limits are available and all classes are considered. Prime is a B+ rated carrier. A rated Lloyd's is also used.
Princeton Risk Managers, Inc.
201 Wall St., Research Park
Princeton, NJ 08540
Contact: Jim Griffith
Phone: (800) 582-7607 (inside NJ) (800) PRM-0099 (outside NJ)
Fax: (609) 924-8155
E-mail: jgriffith@princetonrisk.com
An E&S broker operating in CT, NJ, NY and PA with limits of up to $2 million. All types of risks are considered. Fiduciary liability, fidelity/crime, D&O, and tenant discrimination also are offered. Carriers are AIG, Chubb, Genesis and Markel, all A rated.
Professional Risk Co.
600 University St., 2501 One Union Square
Seattle, WA 98101-1129
Contact: Patrick Campbell
Phone: (206) 621-8808
Fax: (206) 682-9176
E-mail: pat_campbell@professionalriskco.com
Web site: www.professionalriskco.com
An MGA operating in all states except ME and VT. Limits are $500,000/$500,000 to $5 million/ $5 million; minimum deductible is $2,500. Target market is employers with 10 to 1,000 employees. Not written are public entities, attorneys and employment agencies. Third-party discrimina-tion coverage is available by endorsement. Fireman's Fund is the A rated carrier.
Proquest Insurance Agency
210 S. Old Woodward, Ste. 200
Birmingham, MI 48009
Contact: Lisa Gladstone, VP; Michael Kelter, President
Phone: (877) 540-3377
Fax: (248) 540-3223
E-mail: Lgladsto@Kelter-Thorner.com
An MGA/agency operating nationwide. Minimum limits are $250,000/$250,000; no maximum limit. Target market is law firms up to 30 employees. Also offered is management liability policies for privately held companies and private company D&O coverage. Carriers are certain underwriters at Lloyd's, St. Paul Fire & Marine and Lexington, all rated A+ or above.
Quaker Pro
P.O. Box 415
Seagirt, NJ 08750
Phone: (800) 447-4180
Fax: (732) 223-9072
E-mail: mwalsh@gsrinsurance.com
Web site: www.quakerpro.com
An E&S broker operating in all states offering limits of up to $5 million with excess available. All sizes and classes of risk are considered. Defense outside limits, full prior acts, and third-party discrimination is written. Carriers include Markel/Evanston, USLI, Legion, Chubb, Kemper, Hartford and Lloyd's.
Rockwood Programs
228 Philadelphia Pike
Wilmington, DE 19809
Contact: Darryl McCallin, VP
Phone: (212) 291-3071
Fax: (302) 764-5477
E-mail: Darryl_McCallin@web.com
Web site: www.rockwoodinsurance.com
A program manager operating in all states and offering limits of $5 million. Target market is companies with fewer than 1,000 employees. Gulf Insurance is the A rated carrier.
Roush Ins. Services, Inc.
P.O. Box 1060
Noblesville, IN 46061
Contact: Gail C. Pierce, Scott Sackers, Tony Armor
Phone: (800) 752-8402
Fax: (317) 776-6891, 6892, 6893
E-mail: gail.pierce@roushins.com Scott.sackers@roushins.com Tony.armor@roushins.com
Web site: www.roushins.com
An MGA operating in IL and IN. Limits offered are $1 million with excess available to desired limit. All classes are considered. Also offered are E&O, D&O, employee dishonesty bonds, business auto, property & liability, equipment breakdown, workers comp, excess and umbrella. Carriers are Gulf, Markel, Scottsdale and Tudor, all A rated.
Robert A. Schneider Agency
5620 Smetana Dr., Ste. 350
Minnetonka, MN 55343
Contact: Steve Libor
Phone: (800) 862-6038
Fax: (952) 938-0701
E-mail: SL@rasinc.com
Web site: www.rasinc.com
An MGA/E&S broker operating in IA, MN, ND, SD and WI offering limits up to $5 million. All classes are considered. D&O and property/GL also are offered. Carriers are U.S. Liability, Mount Vernon and Evanston.
Sherwood Insurance Services
201 California Street, Ste. 1000
San Francisco, CA 94111
Contact: Pete Thrasher, Lee Hawkins, Jane Moore
Phone: (415) 956-3236
Web site: www.sherwoodins.com
An MGA/E&S broker operating in all states and offering limits as needed. All classes are considered. Several admitted and non-admitted carriers, all A rated, are utilized to place coverage.
S.H. Smith & Co.
41 North Main St.
West Hartford, CT 06107
Contact: Mark Mullarkey
Phone: (800) 356-0168
Fax: (860) 561-3606
E-mail: markm@shsmith.com
Web site: shsmith.com
An MGA/E&S broker operating in all states and offering limits of up to $20 million. All classes are considered, with D&O also offered. Carriers are Admiral, Carolina Casualty, Chubb/Executive Risk, Genesis, Traveler's, U.S. Liability and Lloyd's.
Swett & Crawford Group
21650 Oxnard Street, Ste. 1600
Woodland Hills, CA 91367
Contact: Acess Web site for local office
Web site: www.swett.com
An MGA/E&S broker operating in all states, along with related foreign exposure. Limits offered up to $100 million. Target market is all sizes of business (prefer over 30 employees). E&O, D&O and fiduciary liability are also offered. More than 20 carriers are available, all rated A or better.
Tennant Risk Services, Inc.
99 Pratt St., Ste. 200
Hartford, CT 06103
Contact: Charlene Bauer
Phone: (860) 527-9717
Fax: (860) 527-2438
Web site: www.tennant.com
A broker operating in all states and offering limits of up to $5 million. Third-party discrimination coverage is offered. Carriers are Evanston, Gulf, Monitor Liability, Northland and London underwriters.
U.S. Risk Insurance Group
10210 N. Central Expressway, Ste., 500
Dallas, TX 75231
Contact: Jay Alston, Keli Eddings, Joann Taylor
Phone: (800) 232-5830
Web site: usrisk.com
An MGA/E&S broker operating countrywide and offering limits of up to $10 million. All classes are considered. Miscellaneous professional liability is also available. Carriers are Lloyd's and various admitted and non-admitted carriers are used. *
