Thinking about EPL? More companies are saying #MeToo

#MeToo is here to stay. More and more, organisations are asking themselves if employment practice liability insurance is right for them

Thinking about EPL? More companies are saying #MeToo

Risk Management News

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Months have passed since #MeToo first flooded our Twitter homepages, but the movement doesn’t show any signs of waning.

Quite the opposite. Businesses are now looking inward as they face the potential shift of allegations from Hollywood into the corporate world.

One of the tools available to risk managers looking to cover the exposure is through employment practice liability (EPL) insurance. The policies cover all kinds of workplace-related, claims ranging from discrimination and wrongful termination to harassment. It’s a huge market, and one that’s growing. Last year, Nationwide reported a 15% increase in sales.

“EPL has been at the forefront of topics for a long time, and obviously we’ve seen a huge uptick in headlines [about sexual harassment],” says Terry Campbell, managing director at Arthur J. Gallagher. “It’s causing a lot of people to be challenged and ask themselves: Do I have risk? Did somebody do something 10 years ago that I don’t know about?”

Allegations from long ago aren’t exempt from prosecution, as proven by Bill Cosby’s recent sentencing for an assault he committed 14 years ago. “It’s creating a lot of issues for risk managers,” says Campbell. “What do you do? How do you prepare yourself? What do you disclose? What do you not disclose?”

Over 70 insurers now offer EPL coverage, with conversations about its uptake swirling throughout risk management departments worldwide. “One thing you can say right now is that very clearly, the people who were not buying EPL are now worried about their balance sheet, just like any other part of their balance sheet,” says Becker.

Social media has upped the stakes for organisations facing a crisis – especially when involving sexual harassment claims, which searchable taglines like #MeToo have helped push to the forefront of the court of public opinion. “Social media is disrupting the very traditional industry, which moves at a snail’s pace and cannot manoeuvre,” says Campbell.

“The intensity of the speed for finding a remedy, for an investigation, and for a solution has become a huge part of our society. We want a solution now,” says Lance Becker, also managing director at Gallagher.

Support services, like crisis communications experts, for example, can be included in EPL policies. But those are things that need to be negotiated before you’re faced with a Harvey Weinstein-sized scandal.

“Risk management happens in the consulting process, before the event,” says Campbell. “A policy provides coverage not only for the adjudication of an event – usually outside experts come as part of the policy – but if you’re making decisions about included services at the time of the crisis, you’re making the decision at the wrong time. You’re too late. Those things need to be discussed and agreed to before a crisis hits.”

Like any other exposure, insurance is only one aspect of a risk management programme. Campbell says, “I think people are looking at [sexual harassment risk] and asking, ‘Are there things we should know about from a service standpoint and expertise that are not just the policy, but are things that could help us should an event arise in the future?”

 

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