Practices face a constantly broadening spectrum of risks related to management. These executive exposures are most often associated with Directors and Officers (D&O) Liability Insurance, Employment Practices Liability (EPL) Insurance, and Fiduciary Liability Insurance. Failure to properly insure these threats can pose serious financial repercussions for your practice in the event of a claim. Read on to learn more about each of these coverage options and how the pertain to your practice.
Directors and Officers Liability Insurance (D&O)
Why do I need to purchase D&O Liability Insurance if we are a privately-held company?
All companies, both publicly or privately held, have exposures related to the management of their affairs. The exposure is not limited to shareholder suits either, even unsubstantiated claims can generate thousands of dollars of exposure in defense costs alone.
D&O insurance covers actual and alleged wrongful acts related to the management of company-related business including; misstatements or misleading statements, failure to disclose pertinent information, providing incomplete information, breach of duty, mismanagement of the company's financial business, operating in bad faith, and otherwise breaching the fiduciary duty of acting in the company's best interest. Coverage for these claims includes defense and related expenses costs, judgements, and settlements.
Who can be implicated in these claims?
Claimants can include-though may not be limited to-shareholders, business partners, competitors, regulators, suppliers, vendors, creditors, and potential buyers.
Employment Practices Liability Insurance (EPLI)
Why do I need to purchase EPLI?
In 2017 alone, the United States Equal Opportunity Commission recorded more than 84,000 charges filed for these kinds of claims. The reality is, if your company has employees, utilizes contractors, or deals with third-parties of any kind (i.e. patients, suppliers, vendors, etc.) you have EPL exposure.
EPLI covers actual and alleged wrongful acts including; failure to hire, failure to promote, negligent evaluation, hostile work environment, equal pay violations, retaliation, discrimination, harassment, negligent supervision, wrongful termination, defamation, libel, slander, disparagement, invasion of privacy, and third-party claims that occur between a company employee and an outside party. Coverage for these claims includes defense costs, judgements, and settlements.
In claims of discrimination who are the protected classes?
Protected classes are based on; race, religion, national origin, age, sex, sexual orientation, gender identity, pregnancy, citizenship, familial status, disability status, veteran status, and genetic information.
Fiduciary Liability Insurance
Why do I need to purchase Fiduciary liability Insurance?
If your company has a qualified retirement plans covered by the Employee Retirement Income Security Act of 1974 (ERISA), health and welfare benefit plans, you have Fiduciary Liability exposure. Plans covered by ERISA include Defined Benefits Plans and Defined Contribution Plans such as 401(K) plans.
Fiduciary Liability insurance covers actual or alleged fiduciary related wrongful acts of mismanagement by company ownership, management, or leadership in handling company's employee benefits. The plans include; qualified retirement plans, federal statutes, medical insurance, dental insurance, disability insurance, life insurance, etc. Coverage for these claims include defense and related expenses costs, judgements, and settlements.
If you have questions regarding your current coverages, or are looking to learn more about the aforementioned executive liability insurances, please feel free to contact your account manager for more information. You contact your agent at 800-318-9930 or info@profrisk.com