Is Coverage Provided by Your D&O, EPLI, or CGL Insurance Policy?

An employer will usually immediately want to determine if any of its insurance policies cover an employee’s claim. An experienced lawyer at a Bronx discrimination law firm realizes the importance of quickly determining insurance coverage. This is due to the fact that many policies require pre-authorization for any defense costs that the policy covers, as well as to insure that the policy’s filing deadlines are met.

Insurance coverage falls under state law with obligation by an insurer to indemnify or defend an employer varying in different states. Employers may be covered under an Employment Practices Liability Insurance policy (EPLI) or a Comprehensive General Liability policy (CGL). An employee defendant may have a Directors’ and Officers’ Liability policy (D&O).
Some claims may not be covered while others will. For example, under general liability policies, intentional torts imputed to employers are typically excluded, while intentional torts under EPLI policies may be covered.
A Bronx discrimination law firm realizes there may be variations in state local laws concerning requirements that govern indemnification for punitive damages or intentional discrimination. Some negligence claims against employers for torts perpetuated outside the employment arena may be covered.
For any claim covered by a policy, a Bronx discrimination law firm knows that the insurance carrier is required to indemnify and defend the employer for its loss. The requirement to indemnify is narrower than the requirement to defend, which obligates the insurer to defend an employer when a policy the employer has might possibly cover any of an action’s asserted claims.
An insurance carrier typically will send a “reservation of rights” letter to an employer when a question pertaining to coverage exists. This letter accepts defense of the claim while reserving authority to later deny liability. An employer who receives a reservation of rights letter may be able to select its own counsel depending on the circumstances. Typically, the insurer must pay rates that it pays to attorneys retained for similar actions in the same area. The insurer may choose to wait until conclusion of the action before resolving the coverage issue.
If you have questions and concerns regarding an employment situation and would like to speak with an experienced and knowledgeable attorney at a Bronx discrimination law firm, please contact the Law Office of Delmas Costin, Jr. by calling 718-618-0589.