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Employment Practices Liability Insurance (EPLI) Coverage Renewal and Legal Defense Benefit (LDB) Reminder

07/01/18

Author: ADP Admin/Friday, June 29, 2018/Categories: Bulletin News

All organizations, no matter how well managed, are vulnerable to claims of wrongful employment practices arising from terminations, discipline, or employee complaints. The jury awards that sometimes result from such claims can run into six figures or more. Adding to the challenge facing employers is a complex regulatory environment where inadvertent noncompliance is all too common.

As a client of ADP TotalSource®, your organization has access to a team of specialists in all facets of Human Resources management. We understand the administrative challenges you face and we provide the advice and guidance to help you make the best decisions for your business.

In addition to compliance guidance, ADP TotalSource provides valuable additional benefits to help you protect your organization’s financial interests in the event of a claim. These benefits include Employment Practices Liability Insurance (EPLI) coverage, the Legal Defense Benefit (LDB), and the Equal Employment Opportunity Commission (EEOC) Human Resource Service.

To ensure you continue to remain eligible for these benefits, please take a minute to review the following important information about these programs, including the changes described below.

Employment Practices Liability Insurance (EPLI)
EPLI coverage provides up to an aggregate $1M dollars per year for covered employment claims brought during the term of the Client Services Agreement (CSA) by a worksite employee or an applicant. For claims covered under the policy, our insurance carrier has the right and duty to appoint defense counsel to represent your organization, and your organization will be responsible for any obligation incurred without our insurance carrier’s consent. The policy should be reviewed in conjunction with this letter. This letter does not modify the terms or conditions of the policy.

Please note, a new annual policy period begins August 1, 2018. No changes have been made to the policy for the new annual policy period.

The self-insured retentions/deductibles remain the same, as identified below:

For claims made outside the state of California:
Self-Insured Retention/Deductible for Settlements and Judgments:
  • $ 25,000
Self-Insured Retention/Deductible for Defense Costs:
  • $ 75,000


For claims made in the state of California:
Self-Insured Retention/Deductible for Settlements and Judgments:
  • $ 100,000
Self-Insured Retention/Deductible for Defense Costs:
  • $ 100,000
Attached for your review is an updated Employment Practices Liability Coverage Information Summary on this topic. For further information or for a copy of the policy, please contact Kristy Daly at Aon, ADP TotalSource’s insurance broker, at (800) 743-8130.

Other EPLI-Related Insurance Coverages

Through its relationship with ADP TotalSource, Arch Insurance Company provides clients of ADP TotalSource (except law firms and car dealers) with the option to apply for a separate policy related to its EPLI claims that provides limits in excess of the $1MM aggregate limit provided by Zurich and/or third party coverage. The policy is issued in the client’s name and premiums are paid directly by the client to Aon. If your company is interested in obtaining a quote, please contact Kristy Daly at (800) 743-8130 for more information.

Legal Defense Benefit (LDB)
ADP TotalSource protects your organization’s financial interests through our LDB. If a covered claim or lawsuit is filed against your organization, ADP TotalSource will extend the LDB provided all CSA conditions are met, which include but are not limited to contacting ADP TotalSource prior to taking an adverse employment action and following ADP TotalSource’s recommendation(s) regarding the incident from which the claim arose. Upon acceptance of the LDB by your organization, ADP TotalSource will select a skilled employment law attorney to investigate the claim and defend your company. Attorneys’ fees for LDB eligible claims will be paid by ADP TotalSource up to the following amounts:

Location of the Claim

Amount of the Legal Defense Benefit

Within the state of California*

Up to $100,000.00

Outside the state of California

Up to $75,000.00

*If a covered EPLI claim filed within the state of California results in a settlement or judgment in excess of $50,000, ADP TotalSource will fund the remainder above $50,000 of the applicable Self-Insured Retention/Deductible for Settlements and Judgments for such claim if (i) the requirements for the LDB set forth in your CSA are satisfied with respect to such claim such that you are eligible for the LDB at the time of the applicable settlement or judgment, (ii) you have paid the first $50,000 of the Self-Insured Retention/Deductible for Settlements and Judgments with respect to such claim, and (iii) the CSA is in effect and has not been terminated by either party. In no event will ADP TotalSource’s payment towards your Self-Insured Retention/Deductible for Settlements and Judgments exceed $50,000.

Attached for your review is Legal Defense Benefit- Frequently Asked Questions on this topic. For further information, please contact your Human Resource Business Partner.

Equal Employment Opportunity Commission (EEOC) Human Resource Service
The EEOC is the federal government agency that enforces anti-discrimination laws. If an employee files a charge with the EEOC or state equivalent, the respective agency will send a notice requesting that you respond with a position statement. After receiving your position statement, the EEOC will determine whether it has reasonable cause to believe a violation of the law occurred. One of the services your organization may be eligible for is preparation of the position statement.

For further information on the Human Resource Service, please contact your Human Resource Business Partner.

You can rest assured that ADP TotalSource is your trusted advisor in human resources management. As our client, our team of professionals will support your organization with compliance guidance, as well as benefits such as EPLI coverage, LDB, and the EEOC Human Resource Service – all services dedicated to help you protect your organization’s financial interests in the event of a claim.

The aggregate limit of coverage for the program remains at $40,000,000.

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