Legal benefits are one of those things you hope you never need. But, just in case, ADP TotalSource® has you covered with Employment Practices Liability Insurance (EPLI) coverage and the Legal Defense Benefit (LDB).
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Legal benefits are one of those things you hope you never need. But, just in case, ADP TotalSource® has you covered with Employment Practices Liability Insurance (EPLI) coverage and the Legal Defense Benefit (LDB).
Please take a minute to review the following important information, including the changes described below.
Employment Practices Liability Insurance (EPLI)
The EPLI coverage provided offers up to an aggregate $1M dollars per year for covered employment claims brought by a worksite employee or an applicant during the term of the Client Services Agreement (CSA). A new annual policy period begins August 1, 2026. The EPLI coverage is provided through Federal Insurance Company (“Chubb”).
Retentions
The self-insured retentions/deductibles remain the same, as identified below:
o Limits of Insurance:
§ Each client company sublimit: $1,000,000 each insured event & annual aggregate
o Self-insured retention/deductible for settlements and judgments:
§ $ 25,000 all states other than California
§ $ 200,000 California
o Self-insured retention/deductible for defense costs:
§ $ 75,000 all states other than California
§ $ 200,000 California
Coverage
Please note that this year’s policy includes the following change to Section I. Conditions, A. Other Insurance:
The Insuring Agreement of the previous policy stated:
Primary Insurance – Unless expressly written to be excess over other applicable insurance, it is intended that this insurance be primary with respect to Wrongful Termination, Discrimination, Sexual Harassment and Workplace Torts.
Effective August 1, 2026, this clause has been changed to state:
Excess Insurance – In connection with any covered Claim made against a PEO Client Company, or any of the Insureds as set forth in Section III of this Coverage Part, with respect to Wrongful Termination, Discrimination, Sexual Harassment and Workplace Torts, and subject to all other terms and conditions herein, this Coverage Part shall apply specifically excess of, and shall not contribute with any indemnification to, any other insurance coverage that is valid and collectible to the PEO Client Company, or any of the Insureds as set forth in Section III of this Coverage Part.
The above change simply means that if you have other EPLI coverage:
· If your Other Insurance language declares your policy as primary, your policy (retention, limit, terms and conditions, etc.) will apply first.
· If your Other Insurance language declares your policy as excess, determination for which policy (retention, limit, terms and conditions, etc.) will respond will be determined at the time of the claim by Chubb and the carrier for your standalone policy. If you prefer to have the Chubb policy respond first, consider discussing with your current broker to make your policy expressly excess of a PEO EPL policy.
Claims prior to August 1, 2025
Any prior claims for which coverage was afforded by Zurich will continue to be managed by Zurich.
There have been no further changes to the terms of the EPLI policy. For more information, click here to review an updated Employment Practices Liability Coverage Information Summary on this topic. For a copy of the policy, please contact ADPTotalSource@marsh.com. For any additional questions regarding EPLI coverage, please contact Bella Rose with Marsh Risk, ADP TotalSource’s insurance broker, at Daniela.Rose@marsh.com.
Legal Defense Benefit (LDB) Programs
ADP TotalSource protects your organization’s financial interests through our LDB, for which there have been no changes to the program. 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:
Legal Defense Benefit
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Location of the claim
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Amount of the LDB
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Outside the State of California
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Up to $75,000 toward defense fees
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Legal Defense Benefit +
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Location of the claim
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Amount of the LDB
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Within the State of California
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Up to $200,000 toward defense fees
Up to $150,000 toward settlement/judgment (after your organization pays the first $50,000)*
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*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 of the applicable Self-Insured Retention/Deductible for Settlements and Judgments above $50,000 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 $150,000.
For more information, click here to review an updated LDB Frequently Asked Questions on this topic.
For more information, please contact your HR Client Service Team. They will help guide you to optimize your company’s ability to utilize these benefits should the need arise.
The descriptions of the LDB and other related benefits provided by the CSA do not amend, alter, or replace the terms, conditions, exclusions and other provisions of the CSA, unless otherwise indicated, nor do they amend, alter, or replace any applicable laws or regulations.
The descriptions of the insurance coverage provided by this policy do not amend, alter, or replace the terms, conditions, exclusions and other provisions of the policy nor do they amend, alter, or replace any applicable laws, regulations, rating rules, or plan. The information contained in this document provides only a general overview of subjects covered, is not intended to be taken as advice regarding any individual situation, and should not be relied upon as such. Insureds should consult their insurance and legal advisors regarding specific coverage issues. All insurance coverage is subject to the terms, conditions, and exclusions of the applicable individual policies. Marsh cannot provide any assurance that insurance can be obtained for any particular client or for any particular risk.