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Member, Beacon International Group, Ltd.
Combining wage-and-hour coverage with employment practices liability insurance is gaining marketplace acceptance and is expected to bolster the former’s popularity.
Experts say about $100 million in capacity is available, with primary coverage being provided by XL Group P.L.C., Allied World Assurance Co. and Markel Corp. out of Bermuda, and by the Beazley Group P.L.C. in London. Other markets also are expressing interest in providing the coverage.
Observers say interest in wage-and-hour coverage has not taken off dramatically because, as a relatively new product, underwriters have been charging high premiums and retentions. These, however, are beginning to decrease as underwriters gain experience.
Insurer interest has been “steady, but not to the degree where it’s attracting a lot of attention from other (insurers) by saying, ‘Wow, there’s a lot premium I’m missing,’” said Phil Norton, Chicago-based president of Arthur J. Gallagher & Co.’s professional liability division.
However, interest is growing in hybrid coverage.
Mark L. Simons, senior vice president of Marsh L.L.C.’s FINPRO division in Hamilton, Bermuda, said of the 30 wage-and-hour policies Marsh has bound, almost half combined or blended EPLI and wage-and-hour coverage.
“There definitely seems to be more interest” in the combined product, said Wayne Imrie, London-based management liability underwriter at Beazley.
Aside from companies in general, Mr. Imrie said there also is more interest in wage-and-hour coverage from what Beazley considers to be midmarket companies, which have 1,000 or more workers.
New Labor Department guidance on classifying workers as employees versus independent contractors is expected to increase litigation against employers.