EPLI offers opportunity for growth

Market penetration remains under 20% of operating locations

The employment practices liability insurance market remains one that is rife with opportunity. A vast majority of businesses continue to operate without this protection, according to data compiled by MarketStance, Middletown, Connecticut. And despite this under-penetration, the market still provides written premiums in excess of $1.3 billion.

Of the nearly 8.78 million business locations covered by the MarketStance data, only a little over 221,000, or 2.5%, have EPLI coverage. Small commercial enterprises represent the largest group of businesses with 7.48 million locations. It also represents the least penetrated market with only 81,000, or 1.1%, of the business locations having EPLI coverage. The middle market is the best-penetrated market group with nearly 74,000, or 11.9%, of the 617,000 middle market business locations having EPLI coverage; only 9.7% of the nearly 682,000 national accounts are covered.

Health and education services has proven to be one of the most attractive markets based on the relatively high market penetration and the premium volume provided by that market. The largest subgroup in that market segment, general medical and surgical hospitals, provides $60.4 million in premium and a penetration rate of 12.9%. Colleges, universities and professional schools, the second largest group in this market segment, provides $24.7 million and only a 4.1% penetration rate. Elementary and secondary schools is third with $24.4 million and a 2.5% penetration rate; next is nursing care facilities with $19.4 million and a 16.9% penetration rate; and individual and family services with $18. 3 million and a 1.5% penetration rate.

With nearly 7 million small and middle market operating locations currently without EPLI coverage, this appears to be an ideal market for independent agents. There continue to be suits alleging unfair employment practices, and there is evidence that these suits tend to grow during an economic slowdown.

For further information on EPLI or other niche markets, contact MarketStance at (888) 777-2587 or e-mail at info@marketstance.com. *