EPLI coverage often represents a dilemma for employment defense attorneys that want to become EPLI panel counsel.
When an employer client has a claim that becomes subject to an employment practices liability insurance (EPLI) policy, the law firm may discover that they are not able to represent their client in pre-suit or litigation matters. This happens if the law firm is not either: a) a panel counsel member for the employer’s insurance carrier; or b) named in the EPLI policy as the insured’s counsel of choice.
There are a number of actions that an employment defense law firm can take to increase their chances of defending the employer in an EPLI claim. The primary initiative starts by establishing a comprehensive understanding of how many of the firm’s employer clients have EPLI coverage.
Below are basic questions that an employment defense law firm can ask every employer client in order to identify the next steps in pursuing panel appointments.
Yes: Employer has EPLI Coverage
If the employer does have an EPLI policy, the law firm should first identify and record the carrier, the broker and the effective and/or renewal date of the policy.
Next, the law firm should ask if it is named in the policy as the counsel of choice. If the law firm is not named, the law firm can encourage the client to have the law firm named when a claim is filed or when the policy is up for renewal.
No: Employer not Protected by EPLI
The law firm can ask if the employer plans to acquire EPLI coverage in the future. If the answer is yes, the law firm might make an introduction to a broker and then work with the insured to have the law firm named as the counsel of choice.
If the employer does not plan EPLI coverage in the near term, the law firm should stay in communication on this matter in the event of a change.
Tracking Law Firm EPLI Opportunities
The law firm can use a basic Excel file to track this survey process. Simply list all client employer names down the first column, followed by columns for carrier name, broker name, policy dates, etc.
The aggregate data collected can be very valuable to the law firm, by giving insights into the leading EPLI insurance carriers and brokers in their region. This information will help the law firm to identify where to focus their business development resources when trying to get on an EPLI insurance panel.
Background on the EPLI Market
There are four primary EPLI or employment-related market segments for the employment defense law firm, in order of priority:
- EPLI insurers
- Self-insured retention (SIR) programs (retailers, restaurants, hospitality, etc.)
- Municipalities and government agencies
The law firm will want to give some careful thought as to how to best target their business development efforts when it comes to expanding their EPLI panel counsel efforts.
According to a 2014 EPLI white paper published by Advisen and AIG:
- Companies with as few as 100 employees can expect to receive an employment practices claim once every three years, according to the 2012-2013 edition of Jury Award Trends and Statistics published by Westlaw.
- The probability of the plaintiff winning a case at trial stands at 51 percent, according to Westlaw.
Common EPLI Claims
The types of claims most frequently covered under an EPLI policy include:
- Wrongful termination
- Sexual harassment
Additional types of inappropriate behavior in the workplace that can be covered by an EPLI policy include:
- Invasion of privacy
- Failure to promote
- Deprivation of a career opportunity
- Negligent evaluation
EPLI Market Penetration
EPLI can be written as a stand-alone policy, but is in fact often written in conjunction with other types of management liability, such as Director & Officer (D&O) insurance or (more recently) cyber insurance.
The EPLI market is widely viewed as a growth area, with only 12 percent of employers overall being protected by a policy. This number increases when viewing policyholders by size of the company.
Employers with more than 100 employees, for example, have a 21 to 23 percent EPLI coverage rate. Over a third of firms (34 percent) with 500 to 750 employees have EPLI coverage, and 40 percent of employers with a workforce of more than 1,000 are covered, according to the white paper.
Help with EPLI Panel Counsel Business Development
Here are three benefits available to employment defense law firms that work with Legal Expert Connections to expand their EPLI panel counsel program:
- We are the leading U.S. legal marketing agency specializing in the insurance defense market. We know the panel counsel process, and focus on helping you get new engagements.
- Save time and money. You get quality results without the need to invest in senior in-house marketing / business development staff with the associated overhead expense for office space, equipment, and benefits.
- Increase revenue with professional, on-going legal marketing campaigns. We do the research to identify EPLI insurance panel managers, so you can accelerate your business development process.