Effective August 1, 2014 our Employment Related Practices Liability (EPLI) program is changing for new and renewal policies. For Vermont insureds, this change includes the addition of a specified defense cost limit.
As you may be aware, the Vermont Department of Financial Regulation requires defense costs to have a separate limit which is equal to that of the liability limit. At the same time, expenses associated with claims settlement ultimately affect pricing and availability of a product. Defense costs for employment related claims typically start at $45,000, and they can quickly escalate.
To maintain competitive pricing and continue to offer insureds a viable product, defense costs will have a specific limit equal to the amount of the settlement. To achieve this outcome, the limit of liability will be divided evenly between defense and settlement. A sample declaration page is attached for your review.
Across all of our service states, revisions to the EPLI program include moving healthcare services classes into the “High Hazard” rating category. They also include the addition of Patient Abuse Exclusion (form #14070) to all Employment Related Practices with Third Party Coverages policies for insureds in the healthcare services industry.
Other form revisions include editorial changes, and reductions to coverage as follows:
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New provision for Transfer of Control – states insured will pay all expenses incurred for transferring control of claim after Limits of Liability are exhausted.
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Exclusion for Fraud, Collusion and Criminal Offenses now precludes coverage for person(s) or organizations(s) defined as Insureds in the policy.
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New provision describing claims involving the same wrongful act as constituting a single claim.
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“Claims” is defined as a written demand for monetary relief.
As a courtesy to our insureds, they will receive a letter describing the changes to their EPLI policy being implemented at the next renewal. This document will appear in your Policy Notification Report, and will also be accessible through the Associated Documents option in Policy Inquiry.
We appreciate your support of these changes, and we thank you for your continued loyalty to Patriot Insurance.
