The Truth About Your Excess Policies

By Jolie Small, Vice President, Alliant Insurance Services

Is your excess form truly “follow form,” and does that even really exist?

We spend a lot of time reviewing, editing and manuscripting primary policies but oftentimes excess policies are either just put into place or renewed without a second glance. Insurance Companies have enough reasons to deny claims, let’s not give them any extra. Be sure to check your excess forms just as closely as your primary. The goal is to make sure that the excess policies essentially grant the same coverage (if not broader) than your primary policy. If the policy language is significantly different than the excess policy may not respond to the same losses as the primary policy.

Two of the most important issues to look out for are (i) what triggers the policy coverage and (ii) if the most restrictive underlying language is present in the excess form.  Excess policies used to state that coverage would not be triggered until there was an “actual payment of loss by the underlying insurers.” But what if the Insured cannot afford to wait for the actual payment on the underlying? Excess policies need to recognize erosion of underlying limits, regardless where the source of payment comes from.  Meanwhile most restrictive underlying language is often still found in excess policy forms. Most restrictive underlying language is intended to make the excess policy follow any underlying policy provision as opposed to just the primary policy provisions.

The wording in your excess policy is just as significant as the wording in your primary policy. Some other key items to look out for is to make sure that there are limited exclusions in the policies, that the extended reporting periods are concurrent with the primary percentages and more stringent notice requirements are not present.

In an ideal world excess policies would be only one line which states, “we follow all definitions, terms and conditions of the primary policy,” but until then do not forget to double check all your forms, not just the primary.

EEOC Focuses on Harassment in the Workplace in the Wake of #MeToo

By Cara Murray, Assistant Vice President, Alliant

In October 2017, allegations of rampant sexual abuses by Hollywood producer Harvey Weinstein finally broke through to major news sources after decades of rumors of his engaging in sexual harassment and assault. The high profile revelations to the general public gained traction in the public narrative, and the conversations started in the aftermath of Weinstein ballooned into the wider #MeToo movement – a hashtag showing the prevalence of sexual harassment and assault (experienced predominantly but not exclusively by women), especially in the workplace.

In addition to the general public, the US Equal Employment Opportunity Commission (EEOC) was paying careful attention to the #MeToo movement. The EEOC is the government entity responsible for enforcing federal laws against discrimination, including harassment, against job applicants or employees based on a protected class (race, color, national origin, religion, sex, sexual orientation, gender identity, pregnancy, age, disability or genetic information). Not surprisingly, this major public discourse on harassment was of interest to the EEOC, especially considering the EEOC had just launched their Respectful Workplaces training program, a program developed following the 2016 meeting of the EEOC’s Select Taskforce on the Study of Harassment in the Workforce.

On June 11th, 2018 the EEOC reconvened the Select Taskforce on the Study of Harassment in the Workforce in a meeting called “Transforming #MeToo into Harassment-Free Workplaces.” Commissioner Chai Feldblum, in her opening statements of the meeting, emphasized the national focus on sexual harassment and the opportunity the EEOC has to leverage that focus in furtherance of its mission.[i]  Commissioner Feldblum made a point of emphasizing that the EEOC is seeking sustainable change in the workforce in decreasing all kinds of harassment, including but not limited to sexual harassment. In fiscal year 2017, harassment charges made up about 30% of the charges under all statutes enforced by the EEOC.[ii]  Within that 30%, sexual harassment accounted for approximately 35% of charges, with racial harassment accounting for 27% of charges, and harassment on other grounds accounting for the remaining 38% of harassment charges.[iii]  It is yet to be seen whether the Harvey Weinstein revelations will have an impact on the number or proportion of sexual harassment charges filed. Acting Chair Victoria Lipnic’s opening statement notes that the revelations came out at a time that coincided with the EEOC’s fiscal year (which begins in October and ends in September), and that there are typically delays in charge filing, so the EEOC cannot yet say if they will end up seeing more sexual harassment charges as a result of the #MeToo movement.[iv]

With a prominent place in public narrative, and with EEOC scrutiny at a bolstered high, harassment is an issue that companies should be carefully monitoring for, and attempting to prevent, in their workplaces. As well as continued development, implementation, and review of company policies and procedures against harassment in the workplace, it may also be beneficial for companies to review their Employment Practices Liability coverage in light of this EEOC focus. In particular, it is important to make sure the definition of Employment Practices Violation (or Employment Practices Wrongful Act) explicitly references harassment, and that such reference to harassment is not limited to sexual harassment.

In the wake of #MeToo, workplace harassment is high in public consciousness. The EEOC sees this public and media focus as an opportunity to effectively fulfill its role of enforcing federal laws against discrimination, including harassment. Companies should be on alert for harassment in their workplaces, because the general public and the EEOC are certainly paying attention.

[i] Opening Statement of Commissioner Chai R. Feldblum (2018) https://www.eeoc.gov/eeoc/task_force/harassment/feldblum.cfm

[ii] Derived from data found in the EEOC’s enforcement and litigation statistics. All Statutes https://www.eeoc.gov/eeoc/statistics/enforcement/all.cfm and All Charges Alleging Harassment https://www.eeoc.gov/eeoc/statistics/enforcement/all_harassment.cfm

[iii] Opening Statement of Acting Chair Victoria A. Lipnic (2018) https://www.eeoc.gov/eeoc/task_force/harassment/lipnic.cfm

[iv] Id.