Complete Making case standalone monoline EPLI solutions Guide

Complete Making case standalone monoline EPLI solutions — The Complete Guide to Standalone Monoline EPLI Solutions

Employment Practices Liability Insurance (EPLI) is a critical safeguard for businesses in today’s litigious environment. As employment-related risks become increasingly complex, many brokers and risk managers are re-evaluating their approach to EPLI. This guide explores the advantages of standalone, monoline EPLI policies, providing a comprehensive overview for employers seeking robust protection against employment-related claims.

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Understanding the Shift Towards Standalone EPLI

Traditionally, EPLI was often bundled with other coverages like General Liability or Property insurance. However, this approach can leave significant gaps in protection. Allison Arnold, a professional lines broker at JenCap, highlights a growing trend: a shift towards standalone, or monoline, EPLI solutions. These dedicated policies offer distinct advantages over bundled options, primarily by providing clearly defined limits and tailored coverage enhancements.

The core issue with bundled EPLI is that the limits are often shared across multiple coverages. This means that a large EPLI claim could deplete the overall policy limits, leaving the business vulnerable to other types of losses. Standalone policies, on the other hand, provide dedicated EPLI limits, ensuring that funds are available specifically for employment-related claims. Furthermore, monoline EPLI policies often include crucial sublimits and endorsements that address specific exposures, such as wage and hour violations or immigration-related issues, which are frequently absent or inadequately covered in bundled policies.

Key Benefits of Monoline EPLI Policies

The advantages of standalone EPLI policies extend beyond dedicated limits. These policies are designed to withstand the “real-world pressure” of employment-related litigation, which can be substantial. Settlements for individual suits can easily reach tens of thousands of dollars, while class-action lawsuits can escalate into the millions. Monoline EPLI policies offer several key benefits:

• Clear and Dedicated Limits: As mentioned earlier, this is a primary advantage. The policy clearly spells out the EPLI limits, ensuring adequate coverage for potential claims.
• Tailored Enhancements and Sublimits: Monoline policies allow for customization with endorsements that address specific exposures. Common enhancements include wage and hour coverage and immigration practices coverage.
• Fewer Exclusions: Bundled policies often contain broad exclusions that can limit coverage when claims arise. Standalone policies typically have fewer and more narrowly defined exclusions, providing broader protection.
• Greater Flexibility and Customization: Brokers have more flexibility to customize limits, add specific enhancements, and negotiate better pricing with standalone EPLI policies, resulting in a more tailored and cost-effective solution.

Critical Coverages within Monoline EPLI: Wage and Hour and Immigration Practices

Two specific coverages often found within monoline EPLI policies deserve special attention: wage and hour and immigration practices. Wage and hour claims are on the rise, fueled by increasing litigation and evolving labor laws. These claims often involve allegations of unpaid overtime, minimum wage violations, and child labor law infractions. Industry data reveals that top wage and hour settlements in the US have surpassed $600 million in a single year, highlighting the significant financial risk for employers, especially those in industries with predominantly hourly workforces such as hospitality, healthcare, staffing, and retail.

Immigration-related investigations are another growing area of concern. These investigations often stem from violations of the Immigration Reform and Control Act, which prohibits the hiring or recruitment of undocumented immigrants. While some employers may not perceive this as a significant risk, the current climate makes it prudent to have coverage in place. Monoline EPLI policies often include sublimits specifically designed to help companies navigate these complex legal challenges.

Determining if Standalone EPLI is Right for Your Business

While standalone EPLI offers numerous advantages, it’s essential to determine if it’s the right fit for your business. As Allison Arnold points out, “Any employer with employees faces EPLI exposure.” However, certain industries and business models are particularly vulnerable. Businesses with hourly workforces, high employee turnover, or operations in highly regulated industries should strongly consider standalone EPLI. Examples include hospitality, healthcare, staffing, retail, schools, and nonprofits.

Combining EPLI with Directors & Officers (D&O) coverage can be a viable strategy, as long as the policies provide separate and clearly defined limits for each coverage type. However, when EPLI is bundled into broader property & casualty packages, the coverage often falls short. In these cases, a standalone policy remains the most precise and reliable protection. Ultimately, the decision to choose standalone EPLI should be based on a careful assessment of your business’s specific risks and needs, in consultation with a qualified insurance broker or risk manager.

Conclusion

In conclusion, standalone, monoline EPLI solutions offer a more robust and tailored approach to managing employment-related risks. By providing dedicated limits, customizable enhancements, and fewer exclusions, these policies offer superior protection compared to bundled options. As employment laws continue to evolve and litigation becomes more prevalent, investing in a standalone EPLI policy can provide peace of mind and financial security for your business.

Disclaimer: The information in this article is for general guidance only and may contain affiliate links. Always verify details with official sources.

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