2014 Innovation Awards: Marsh Wage and Hour Preferred SolutionPosted On: Mar. 16, 2014 12:00 AM CST
MARSH WAGE AND HOUR PREFERRED SOLUTION
Marsh USA launched its Wage and Hour Preferred Solution in January 2013, but the story of its origin goes back much further than that.
“Actually, the genesis of this started with my coming to Marsh from an employment practices liability insurance law firm in 2007,” said Adeola Adele, New York-based employment practices liability insurance product leader for Marsh.
Asking herself, “What can we do to improve coverage for the client,” Ms. Adele said Marsh started looking into the product as a stand-alone offering in 2009 and began talking to domestic markets to gauge interest.
The result was the Marsh Wage and Hour Preferred Solution, which won Marsh USA a 2014 Business Insurance Innovation Award and is available nationwide to Marsh clients.
Wage and hour disputes range from employees classified as exempt from overtime to those considered independent contractors to how restaurant tips are divided in violation of federal and state laws.
The Marsh offering is designed to cover wage and hour risks typically excluded under traditional employment practices liability insurance policies.
Limits up to $100 million are available.
The coverage is aimed at any industry in which companies have a large number of employees, such as retail, food and beverage, hospitality, technology, financial institutions, services, manufacturing, and companies with large numbers of exempt employees, hourly employees, and/or independent contractors
The process “really kicked into gear” during 2010, said Ms. Adele, and Marsh drafted a policy in 2011 and started meeting with insurers in Bermuda to develop a product.
The first policy was bound in July 2013, Ms. Adele said.
Part of the success of the product has been in response to insurers altering employment practices liability coverage to make claims more restrictive, said Mark Simons, Hamilton, Bermuda-based senior vice president of Bowring Marsh, which is a unit of Marsh.
Markel Corp.'s Markel Global Insurance of Bermuda is the lead underwriter for the new employment practices liability policies.
“This is partially in response to carriers adding endorsements to EPLI coverage to make wage and hour claims more restricted,” said Mr. Simons.
It originally was aimed at clients with more than 4,000 employees, but “now we are at a point where clients with 1,000 employees are interested in the product,” said Ms. Adele.
The Marsh Wage and Hour Preferred Solution draws interest from businesses in California, New York, New Jersey, Illinois and Florida, due to the states' more comprehensive employment laws.
About 40% of such wage and hourly claims losses come from California, Ms. Adele said.
In fact, in addition to insurers' narrowing of coverage, legislation can also be a driver of the product's growth as states pass employment legislation that could give rise to new claims.
“New legislation can help drive this product's evolution,” said Ms. Adele.