Insurance Community University Executive Liability 1 The webinar will begin shortly. There is no...

Insurance Community University

Executive Liability

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The attendance and proctor forms are available under ‘Materials’ in the Webinar’s Console to the right.

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Use the ‘chat’ window for questions on the content.

100% Participation in Polling Questions is required to receive credit for this class. Even if you do not intend to receive credit, please participate in the polls.


Welcome to your Insurance Community University

• All of you are currently on mute – Un-mute your own system– Telephone Option

• Select Telephone on your screen• Dial in the PIN number so that your number becomes active

– Microphone and/or Speaker Option• You can use this option if you have a headset that you use

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Audio

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Participation & Chat Window

• You will receive information from the monitor via the ‘Chat’ window. – Please locate window in the control panel

• Q & A is welcomed during the presentation and at the end of the presentation

• You will find the question box on your control panel– Write your question in that box

and send it to the presenter/organizer

• The presenter will take those• questions in the order submitted

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DOI Requirements

• When you see a slide with the hand up symbol, touch the “hand” icon on your control panel– Click ONCE only

• If you do not raise your hand, the monitor will be in contact with you in the chat box

• If you are in a group, the designated proctor is responsible to make certain you are all in attendance at all times

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= Hand is down


Polling

• Throughout the class we will be conducting periodic polls

• We need 100% participation on the polls• The polls are intended to check

participation but also to create discussion topics throughout the presentation

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Forms To Complete for CE

• After class ends– Return attendance form– Proctors – return your form to email

address

• Email address is in chat window or in email sent to you today

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DOI Requirements

• We will file your hours with the DOI after the completion of this webinar and we have received the attendance form.

• You have 48 hours to return the form• You will be sent a Certificate of

Attendance/Completion by email. Please retain this for your records for five years.

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Internet Disruption

• If the presenter looses internet connection STAY ON THE LINE

• The administrators will communicate with you


Internet Failure

• If the internet fails and all participants are kicked off line by Go To Training or other source then the seminar will be terminated

• You will receive instructions by email as to how we will proceed

• This is a precautionary notice, only

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This class is being recorded

• Available in the University• This course is approved for CE in CA Only


DisclaimerInsurance forms and endorsements vary based on insurance company;

changes in edition dates; regulations; court decisions; and state jurisdiction. This instructional materials provided by Insight is

intended as a general guideline and any interpretations provided by the instructor or the creator(s) of this material do not modify or

revise insurance policy language. In providing these materials, the authors assume neither liability nor responsibility to any person or

business with respect to any loss that is alleged to be caused directly or indirectly as a result of the instructional materials

provided. Copyright 2010 – 2013 All Rights Reserved

www.insurancecommunitycenter.com

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Your Instructor Today

Marjorie L. Segale, AFIS, CISC, RPLU, CIC, CRIS, ACSR, CISRInsurance Community Center, LLC

Director of EducationPresident: Segale Consulting

[email protected]

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What This Course Will Cover

1. Overview of Executive Liability2. Overview of Directors and Officers3. Employment Practices Liability4. Fiduciary Liability5. Employee Benefit Liability (EBL)

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Polling Question #1

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Overview of Executive Liability

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Executive Liability Basics

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Executive Liability Basics

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Executive Liability Coverage Basics

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D & O BasicsCovered in depth in D & O class

material. Available in the University for

downloading.

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D & O Coverage Basics

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Partnership Liability Coverage Basics

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Employment Practices Liability Insurance (EPLI) Basics

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Employee Benefits Liability Coverage Basics

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Fiduciary Liability Coverage Basics

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Asset Risk and Protection

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Polling Question #2

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Insuring Agreement Sample Language

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EPLI Insuring Agreement

• The Company shall pay, on behalf of the Insureds, Loss on account of any Employment Claim first made against such Insured during the Policy Period or, if exercised, during the Extended Reporting Period, for Employment Practices Wrongful Acts, but only if such Employment Claim is reported to the Company in writing in the manner and within the time provided in Subsection 12 of this coverage section.

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EPLI Wrongful Act

Wrongful Act means an Employment Practices Wrongful Act and, if Third Party Liability Coverage is purchased, a Third Party Wrongful Act.

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EPLI Wrongful Act

Wrongful act means:Breach of Employment Contract, Employment Discrimination, Harassment, Retaliation, Workplace Tort, Wrongful Employment Decision or Termination

committed, attempted, or allegedly committed or attempted by any Organization or by any Insured Person in his or her capacity as such.

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Policy Coverage Response

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Definition of Loss

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Definition of Loss

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EBL Insuring Agreement

a. We will pay those sums that the insured becomes legally obligated to pay as damages because of any act, error or omission, of the insured, or of any other person for whose acts the insured is legally liable, to which this insurance applies.

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Employee Benefit Liability Definition of Loss

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EBLI Limit of Insurance

Subject to the Aggregate Limit, the Each Employee Limit is the most we will pay for all damages sustained by any one "employee", including damages sustained by such "employee's" dependents and beneficiaries, as a result of:

(1) An act, error or omission; or(2) A series of related acts, errors or omissionsnegligently committed in the "administration" of your "employee benefit program".

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EBLI Limit of Insurance

However, the amount paid under this endorsement shall not exceed, and will be subject to, the limits and restrictions that apply to the payment of benefits in any plan included in the "employee benefit program".

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Fiduciary Liability Insuring Agreement• The Company shall pay, on behalf of the Insureds,

Loss on account of any Fiduciary Claim first made against the Insureds during the Policy Period, or, if exercised, during the Extended Reporting Period, for a Wrongful Act committed, attempted or allegedly committed or attempted before or during the Policy Period by such insureds, or by any person for whose Wrongful Acts the Insureds are legally responsible, but only if such Claim is reported to the Company in writing in the manner and within the time provided in Subsection 11 of this coverage section..

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Fiduciary Claim means:

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Fiduciary Claim means:

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Fiduciary Liability Wrongful Act

• Any breach of the responsibilities, obligations or duties imposed by ERISA upon fiduciaries of the Sponsored Plan in their capacity as such fiduciaries;

• Any negligent act, error or omission in the Administration of any Plan committed, attempted, or allegedly committed or attempted by an Insured in the Insured’s capacity as such

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Fiduciary Liability Wrongful Act

• Any other matter claimed against an Insured solely by reason of the Insured’s service as a fiduciary of any Sponsored Plan.

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Polling Question #3

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EPLI Exclusions

• Wage and Hour / FLSA exclusion– Current trend in EPLI litigation due to

exempt v. non-exempt employee status– Some forms include very small amount of

coverage for defense and damages– Significant risk exposure for today’s

employers– A few forms still have sub-limit available

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Wage and Hour Exclusion Sample Language

For any actual or alleged violation of the responsibilities, obligations or duties imposed by any federal, state, or local statutory law or common law anywhere in the world (including but not limited to the Fair Labor Standards Act) or amendments to or regulations promulgated under any such law that governs wage, hour and payroll policies and practices, except the Equal Pay Act (“Wage and Hour Laws”), including but not limited to:

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Wage and Hour Exclusion Sample Language(i) the calculation, timing or manner of payment

of minimum wages, prevailing wage rates, overtime pay or other compensation alleged to be due and owing;

(ii) the classification of any organization or person for wage and hour purposes;

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EPLI Exclusions

• Immigration exclusion– Becoming a more common action today– Look for an exception or a sub-limit for

defense, damages or both

• Bodily injury– Look for exception for mental anguish,

emotional distress, humiliation, etc.

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Bodily Injury Exclusion Sample Language• For bodily injury, mental anguish, emotional

distress, humiliation, sickness, disease or death of any person or damage to or destruction of any tangible property including loss of use thereof whether or not it is damaged or destroyed; provided that this Exclusion 4(h) shall not apply to mental anguish, emotional distress or humiliation resulting from any Wrongful Act;

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Who Is An Insured (or Should Be) EPLI

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Who Is An Insured (or Should Be)EBL / Fiduciary

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On All Policies

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Polling Question #4

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Claims Made and Reported Forms

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Sample Language

Except to such extent as may otherwise be provided herein, the coverage of this policy is limited to liability for only those claims that are first made against you and reported in writing to us during the policy period.

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Possible Coverage Gap

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Basic Extended Reporting Period Example• If we or the named insured shall cancel or elect

not to renew this policy, you shall have the right following the effective date of such cancellation or nonrenewal to a period of sixty (60) days (herein referred to as the “Automatic Extended Reporting Period”) in which to give written notice to us of claims first made against you during the Automatic Extended Reporting Period for any wrongful act occurring prior to the end of the policy period and otherwise covered by this policy.

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Solutions

• Place coverage with a company using a claims made form rather than a claims made and reported form

• Modify coverage with incumbent insurance company

• If all else fails, notify the insured in writing – producer needs to meet with client and obtain acknowledgment in writing from client - annually

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Claim

• Always check the definition of claim– Will vary by policy– When is a claim a claim?

• When it is received by the insured?• When it is filed against the insured?

– Differing definitions when moving the account to another company could leave your client with no coverage

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Reporting Provisions

• Who has to know and who has to tell?– Always make sure that you narrow the

definition of this responsible party to (example) executive officer of the Named Insured (or Parent Company) or risk manager

– Leaving it as the ‘insured’ must notify means that anyone can find out about a claim and failure to report could remove coverage

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Pending & Prior Litigation

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P & P Exclusion Example

“We shall not cover claims: N. first made against you prior to, or pending, as of the first inception date, or relating to the essential facts, circumstances or situation underlying such claim.”

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P & P Exclusion With Proper Exception(b) based upon, arising from or in consequence

of any demand, suit, or other proceeding pending against, or order, decree or judgment entered for or against any Insured, on or prior to the applicable Pending or Prior Date set forth in Item 7 of the Declarations for this coverage section, or the same or substantially the same fact, circumstance or situation underlying or alleged therein;

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Summary

1. Every business client needs some form of business practices liability– D & O – Partnership Liability

2. Every business client with employees needs EPLI coverage

3. Every business client providing benefits to their employees needs Fiduciary Liability that includes EBLI

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Conclusion

4. All presentations are archived on the University homepage – just go to the tab labeled Webinar Archive

5. Check back often in both the Community and University for new items that are being added every week

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Upcoming ClassesUpcoming University/Paid CE ClassesCyber Liability and the Personal Lines Account

FREE to University Members$50.00/charge for non university members

10/10 Manufacturers - Insurance Coverages that are Unique and Essential to Consider

10/15 Voluntary Benefits

10/17 Agricultural Equipment Breakdown

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Join the University TODAY. www.insurancecommunitycenter.comClick Join University at the top of the bar

Upcoming Community Classes FREE to University Members$25.00/charge for non university members

10/22 Cyber Liability and the Personal Lines Account

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