Third Party Discrimination & Harassment Coverage Comparison

Directors & Officers with Employment Practices Liability and a Third Party Discrimination & Harassment Endorsement

Usually a broad D&O policy.

Only one policy to negotiate.

Only one renewal to remember.

Typically, the least expensive option for the most coverage.

Disadvantages

Usually an insured does not purchase high enough limits.

Too many potential losses sharing one limit.

Losses to more than one coverage part can diminish the limits exposing officer’s or owner’s personal assets.

Extent of coverage may be narrow with respect to third party losses.

Predetermined allocation may limit coverage available for the EPL and the third party discrimination and harassment endorsements.

Underwriter may not be as knowledgeable concerning third party exposures.

Monoline Employment Practices Liability with Third Party Discrimination & Harassment Endorsement

Benefits

Usually a broad EPL policy.

Policy is available through many markets.

If third party endorsement is an issue, it is more likely to be available on a monoline EPL policy than on a combined D&O/EPL policy.

Monoline EPL may have more detailed coverage than when EPL is written in combination with D&O. (For example, monoline EPL forms often offer coverage for “breach of privacy” and this is often not available in EPL cover written in combination with D&O).

Disadvantages

Coverage is more focused on the employment side.

Usually an insured does not purchase high enough limits.

Firms which have experienced employee claims may not wish to have their limits diminished by third party claims.

Extent of third party coverage may be narrow if underwriters restrict all or parts of third party coverage.

Access to third party coverage may be limited as many EPL underwriters will not grant the third party extension for the types of businesses that need it most.

Monoline Third Party Discrimination & Harassment (stand-alone policy)

Benefits

Offers the most focused coverage on third party issues.

Protects against the diminution of limits on other coverages (D&O, EPL) by providing separate limits.

Coverage is tailored to associated risks.

Fullest protection especially if purchased with D&O and EPL.

Underwriters understand the exposure and seek to work with clients to address their needs.

Disadvantages

One additional renewal to track.

One additional contract to negotiate.

Since it is not readily available in many markets, stand-alone coverage can be hard to find.

Third party coverage can be more expensive if also buying separate D&O and EPL policies.

May require more time to educate a buyer as to the needs/benefits of purchasing a separate third party policy.