epl& epli underwriting trends: baby boomers come of age panelists: laura r. zaroski, esq....
TRANSCRIPT
EPL& EPLI Underwriting EPL& EPLI Underwriting Trends: Baby Boomers Trends: Baby Boomers
Come of AgeCome of Age
Panelists:Panelists: Laura R. Zaroski, Esq. Laura R. Zaroski, Esq.
Donohue Brown Mathewson & Smyth LLCDonohue Brown Mathewson & Smyth LLC
Thomas M. CaputoThomas M. Caputo
Rockwood ProgramsRockwood Programs
Stuart IshimaruStuart Ishimaru
U.S. Equal U.S. Equal Opportunity Employment Opportunity Employment Commission Commission
Catherine PadalinoCatherine Padalino
Chubb Specialty InsuranceChubb Specialty Insurance
Paul Siegel, Esq.Paul Siegel, Esq.
Jackson Lewis LLPJackson Lewis LLP
New York City ~ April 10 & 11, 2006
2006 Employment Practices 2006 Employment Practices & Fiduciary Liability & Fiduciary Liability
SymposiumSymposium
Why companies don’t buy Why companies don’t buy EPL….and why they shouldEPL….and why they should
The 2005 Chubb Private Company Risk Survey
New York City ~ April 10 & 11, 2006
2006 Employment Practices 2006 Employment Practices & Fiduciary Liability & Fiduciary Liability
SymposiumSymposium
--
The 2005 Chubb Private Company Survey
Commissioned independent study and interviewed 451 privately held U.S. companies to:
• Gain better insight into level of concern about management liability risks
• Measures taken to mitigate these exposures
• Incidence of events that were triggering litigation
• Financial impact of this litigation and other risk events
Asked questions around…Asked questions around…
• Management liability risks involving: Directors & Officers Liability Employment Practices Liability Fiduciary Liability Crime Insurance Miscellaneous Professional Liability Workplace Violence Kidnap/Ransom & Extortion
2005 Chubb Private Company 2005 Chubb Private Company Risk SurveyRisk Survey
• 67% of companies likely to broaden their product offerings.
• 20% plan to reduce or eliminate some employee benefits.
• 21% plan to reduce their workforce.
New York City ~ April 10 & 11, 2006
2006 Employment Practices 2006 Employment Practices & Fiduciary Liability & Fiduciary Liability
SymposiumSymposium
Employment Practices FindingsEmployment Practices Findings
EPL lawsuits are commonEPL lawsuits are common
* According to the 2005 Chubb Private Company Risk Survey
35%
Companies experiencing an EPL charge or lawsuit in the past five years
Small businesses have Small businesses have been suedbeen sued
* According to the 2005 Chubb Private Company Risk Survey
Companies with 50 to 249 employees experiencing an EPL charge or lawsuit
in the past five years
44%
Employment Practices Employment Practices FindingsFindings
• 34% reported costs ranging from $11,000 to $300,000.
• The average cost for this group was:
* According to the 2005 Chubb Private Company Risk Survey
$74,400
* According to the 2005 Chubb Private Company Risk Survey
Percent planning to reduce work force in the year ahead:
Percent planning to outsource functions/operations in the year ahead:
19%22%
27%33%
Size of Company25-49 employees
50-249 employees
Reductions in force and Reductions in force and outsourcing plans outsourcing plans
continue…continue…
Size of Company25-49 employees
50-249 employees
Employment Practices Employment Practices FindingsFindings
• 90% have a written policy banning employment discrimination and sexual harassment
• 73% have human resources policies, procedures, and training programs to
help prevent losses• 64% provide employment discrimination and/or
sexual harassment training.
Are companies financially Are companies financially prepared?prepared?
* According to the 2005 Chubb Private Company Risk Survey
51%
31%
Executives concerned about the financial impact of an EPL lawsuit:
Size of Company25-49 employees
50-249 employees
Are companies financially Are companies financially prepared?prepared?
* According to the 2005 Chubb Private Company Risk Survey
81%
54%
Do not purchase EPLI:
Size of Company25-49 employees
50-249 employees
Executives may be more at Executives may be more at risk than they realizerisk than they realize
• An EPL lawsuit can result in significant financial loss.
• Executives may mistakenly believe their company has insurance coverage elsewhere.
• Litigation against “deep pockets” is commonly seen as means to correct perceived wrongs.
EPL 2006: Market Update EPL 2006: Market Update and Outlookand Outlook
• 2005 “Year of the Class Action”
• Headlines Continue
• Recent Data from EEOC and JVR
Current Economic ImpactsCurrent Economic Impacts• Significant merger & acquisition activity, which often
results in layoffs• Expense driven downsizing
and outsourcing• Displaced workers looking for evidence
of adverse discriminatory impacts• We expect a possible surge in age
and race discrimination claims
EPL 2006: Hot TopicsEPL 2006: Hot Topics
• Wage and Hour
• Panel Counsel issues
• Pending and Prior Litigation