s competitors.

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Telework: Breaking New Ground.
Telework: Breaking New Ground.

Federal Register: Privacy Act of 1974; New Computer Matching Program.
Federal Register: Privacy Act of 1974; New Computer Matching Program.

Meet David Cadez.
Meet David Cadez.

Understanding Employment Practices Liability Insurance<
> Starting a New Career

Starting a new career can be a daunting venture, especially when you have acquired a lifetime’s worth of financial responsibilities and obligations. Nothing, however, is impossible, no matter how strapped for time and money you are currently. All it takes is a well thought out plan and diligence and you can soon be starting a new career.

First, think very seriously about what you want to do. Why have you chosen this new career? Is it completely different from what you are doing now? Are there aspects of your current job that apply to your new career as far as contacts, experience, or education? Does this new career require learning a whole new skill set and industry or is it a matter of upgrading your education to the next level? Make a list of all the assets you already possess that you can bring to a new career. Include personal skills and qualifications as well as natural instincts and inclinations. Some things can’t be taught and if you have a natural predilection for the skills needed for your new career, this may take you further than you think.

Next, determine the steps you will need to take in order to arrive at a position in your new career. To help you do this, talk to people currently working the job you have chosen. How did they get where they are? Would they have done anything differently? Do they have any recommendations? Do you need a degree? Online classes and schools are all over the internet and will allow you to study while keeping your job. Do you need an apprenticeship to establish yourself? Try and find one that pays you. Even a small stipend can help you offset financial costs at home.

With planning and patience, you can start a new career without putting your current home situation at risk. Take one step at a time and allow yourself as long as it takes to complete it before going on to the next one. Your new career isn’t going to disappear while you spend time properly preparing for it.
10 Questions an Interviewer May Ask

Once upon a time job interviews were comprised of a conversation between interviewer and interviewee and based on this conversation, the job seeker was either hired or sent on their way. Within the context of this conversation, questions were asked, but today much of the conversation has disappeared as more and more interviewers are using custom made interview forms. Some of the questions you may encounter include:

1. What is your greatest strength?

2. What is your greatest weakness?

3. Why did you leave your last job?

4. What did you like most about your last job?

5. What did you like least about your last job?

6. How did you solve a problem regarding an angry or dissatisfied customer?

7. How do you handle stress?

8. What would your previous co-workers say about you?

9. Give an example of your ability to make decisions under pressure.

10. Why do you want to work for this company?

There are many variations on the above questions but most of these are pretty standard. Of course, work experience is a given and some employers want to know if you smoke. Often, employers ask questions they are not supposed to ask but it is usually career suicide if you bring up that fact.

The best thing you can do to prepare yourself for any interview is to find out everything you can about the company you are applying for. In addition, make sure you have all the dates clear as to where you worked and how long you worked there. Even if you have already sent a resume take one to the interview with you so that you can glance at it if you need to. Above all, be on time and be prepared!
Career Planning Considerations

There are a variety of factors to take into consideration when choosing the path you will take toward a new career. You will need to assess what you already possess in terms of skills, education, and experience that will apply to your new career. Next, you should consider what you need to break into the industry. If you have what it takes to get into the industry or are already there, consider what you will need to move to the position that you want. Knowing yourself, your finances, and the industry youve chosen inside and out is essential to career planning. Here are a few questions to ask yourself.

Do you need a degree, a certificate, or a skill set that you can obtain through a class to succeed in your new career?

If so, do you have the time and money to finance this education? Can you take out loans, take your classes online, or take some time off work to get this education?

Do you need to be certified? If so, a very specific career path has most likely been mapped out and followed. Find out what others in your area have done, where they’ve gone to school, and where to register for the exam to pass your certification. This will save you a considerable amount of time as you research what you need to do.

Are you sure this career is what you want? Is the time and money invested in education and entry level positions worth it to you? Will the job pay enough money to finance the lifestyle you want to live? Are the day to day characteristics of your new career compatible with your temperament and values? Realistically assessing your interests and capabilities could save you years if you are honest and sure that you are choosing your new career for the right reasons.

“Understanding Employment Practices Liability Insurance”

By: Kenneth A. Rosenberg, Esq.

Due to the myriad of labor and employment laws that govern the employer-employee relationship, virtually all businesses face the prospect of being sued by their employees at some point. For many companies, an employee’s lawsuit, if successful, could be catastrophic since compensatory and punitive damages, together with attorney fee’s and costs, can amount to hundreds of thousands of dollars, if not more. In order to minimize this potential risk, insurance companies created Employment Practices Liability Insurance (hereinafter “EPLI”). Consequently, understanding EPLI coverage is critical for every business in today’s litigious society.

Unfortunately, many business owners, risk managers and human resource managers do not understand the basics of EPLI plans and why they are so important in today’s business climate and thus do not obtain it for this reason. In particular, many businesses are unaware of the following issues involving EPLI coverage:

1. Who is covered?
2. What types of claims are covered?
3. What is the coverage amount?
4. What are the conditions with which the employer has to comply to receive coverage?
5. Who will defend the lawsuit?

Each of these topics will be discussed below.

1) Who is covered?

In general, EPLI coverage insures employers, its employees, directors and officers (otherwise known as the “insured”). In limited instances, coverage may be extended to a spouse of an insured for claims made against jointly held property.

2) What types of Claims Are Covered?

Typically, EPLI coverage insures employers against discrimination, harassment, wrongful termination and employment tort claims which are not covered by other types of business insurance such as comprehensive general liability insurance, directors and officers liability insurance, professional liability insurance and/or worker’s compensation. More specifically, EPLI can be obtained to insure an employer against any actual or alleged wrongful act of an employee including in most cases, but not limited to:

a) Wrongful dismissal, discharge or termination (actual or constructive), including breach of an implied contract;
b) Harassment (including quid pro quo, hostile work environment, or other sexual harassment);
c) Discrimination based on age, gender, race, color, national origin, religion, sexual orientation or preference, pregnancy, or disability;
d) Retaliation;
e) Employment-related misrepresentation(s);
f) Wrongful failure to employ or promote;
g) Employment related libel, slander or defamation;
h) Wrongful deprivation of a career opportunity, demotion or discipline;
i) Negligent hiring, retention, training or supervision;
j) Infliction of emotional distress or mental anguish;
k) Failure to provide or enforce adequate or consistent policies; and/or
l) Violation of an individual’s civil rights.

Moreover, some EPLI policies will cover claims brought by third parties, such as independent contractors or an employer’s customers. However, claims made under the American with Disabilities Act, Family and Medical Leave Act, federal or state wage and hour laws, benefit laws or Occupational Safety and Health Act are sometimes not covered. As such, in reviewing a potential policy, it is imperative for the employer to determine the specific types of acts which would be covered by the insurance policy to ensure the insurance carrier (the “insurer”) has a “duty to defend” against a particular claim. Where a policy does not cover all of the types of claims an employer wants to insure itself against it can often negotiate for and obtain a rider at an additional expense to expand the basic coverage provided by the insurer.

3) What is the coverage amount?

The coverage amount set forth in an EPLI policy is usually expressed as a policy limit. The policy limit establishes the maximum amount that the insurer will pay for a claim after the retention has been met. The term “retention” is another name for a deductible. As such, an EPLI policy may provide that it will pay up to $1,000,000 per claim after the $25,000 retention has been met. This means the insured will be responsible for the first $25,000 of attorneys’ fees and expenses in defending/settling the claim and that the insurer will be responsible for the remaining attorneys’ fees, expenses and settlement amounts associated with the claim up to a maximum of $1,000,000. EPLI policy premiums are directly affected by the retention amount (the lower the retention the higher the premium). An employer that is selecting a retention amount should consider why it is obtaining the EPLI policy as well as how much it can afford to pay in the event it is sued. In particular, the employer should determine whether it is obtaining the policy to reduce the effects of a catastrophic claim or is it merely trying to shift all liability for employment claims to the insurance carrier. Where the employer is seeking to avoid the former it may be willing to obtain a higher retention amount and pay a lower premium, whereas if it is seeking to accomplish the latter it may want a nominal retention amount at a higher premium cost.

Finally, EPLI policies often provide that the coverage amount is affected by an insured’s willingness to settle a claim based upon the insurance carrier’s advice. For instance, insurers will often provide a “carrot” or “stick” incentive to obtain an insured’s cooperation in settling a claim. For example, in some instances a policy may provide that an insured’s retention will be reduced retroactively by a specific percentage (i.e. 10%) if it agrees to settle a claim based on the insurer’s advice. In contrast, other policies may provide that the coverage amount will be capped or the employer will have to split the cost of the litigation with the insurer going forward if an employer unreasonably refuses to settle a claim against the carrier’s advice. This is commonly known as the “hammer clause” in a policy.

4) What conditions does the employer have to comply with to receive coverage?

In order to receive EPLI coverage, employers often have to demonstrate that they have employment policies and procedures that are compliant with all current federal and state laws and regulations. In fact, insurance carriers often will not issue coverage unless these policies and procedures are memorialized in the form of an employee handbook or other written document and the employer demonstrates that it has distributed the handbook and/or written policies to its employees. Insurance carriers also will require employers to demonstrate that they have provided employment training to its employees and corrected or resolved any previous employment problems it had prior to seeking coverage. Where an employer demonstrates that it has taken these steps, the insurance carrier will be more likely to insure the employer and even may offer the employer discounts on its premiums.

Once a claim has been made against an insured, the insured will have to provide timely notice of the claim to the insurer in order to receive coverage under the policy. As such, employers must carefully review their policies to ensure they understand what is defined as a “claim” under the policy. For example, some policies provide that a “pre-lawsuit” or “demand” letter is a claim that triggers the notice requirements under the policy. Others define a claim as any agency charge (e.g., EEOC charge of discrimination). Where an insured fails to provide timely notice as required by the policy, most insurers will either refuse to provide coverage to or defend the employer under the policy or refuse to apply to the policy retention any attorneys’ fees or costs incurred by the employer in defending the claim prior to the late notice of the claim to the insurer. As such, it is incumbent for employers who have obtained EPLI coverage to understand what constitutes a claim under the policy and then to notify all of its managers that if they receive a “demand” letter or other legal papers, etc. the manager should forward them immediately to the company representative responsible for providing timely notice to the insurance carrier. This step is important to prevent an unintentional waiver of coverage rights and to decrease the likelihood of having a coverage dispute with the insurance carrier.

5) Who will defend the employer against the lawsuit?

Lastly, many EPLI policies state that an employer will be defended against a claim by one of the law firms either listed on the insurer’s pre-approved panel of attorneys or, if no panel exists, by a law firm chosen by the insurer. Although it is most common that the attorneys assigned to defend an employer are hand picked by the insurance carriers, employers can generally negotiate for their own attorneys to be approved as defense counsel for the employer’s claim under the policy and, in some instances, to have their attorneys added to the insurance carrier’s panel of approved counsel. This may be an especially important issue for an employer where it has a law firm that is particularly familiar with its business and the history of its relationship with its employees. Hence, employers should not overlook this issue when choosing EPLI insurance.

In conclusion, EPLI coverage can be a valuable tool in managing a business’ risk when sued by one of its employees. However, before obtaining an EPLI policy, an employer must completely understand the terms of the policy in order to ensure it receives the appropriate plan for its particular business needs. As such, it is important for a company to have a good insurance broker to assist them in selecting the appropriate EPLI policy for their particular business. Moreover, once an employer decides to purchase EPLI coverage, it should review its employment policies and procedures and handbooks to ensure they are in compliance with all current federal and state laws and regulations. In the event, a company’s owner, human resources manager or risk manager has questions regarding an EPLI policy or needs assistance in reviewing and revising its employment policies and procedures it should seek guidance from counsel. The attorneys at Grotta, Glassman & Hoffman, P.C. have substantial experience in such matters.

Copyright 2006 ?, Kenneth A. Rosenberg, Esq.

About the Author

Kenneth A. Rosenberg, an associate of Grotta, Glassman & Hoffman, P.C., represents employers in all aspects of labor relations and employment law. Mr. Rosenberg represents his clients in contract negotiations, interest and grievance arbitrations, unfair practice proceedings, disciplinary hearings and in federal and state courts and various administrative agencies regarding employment litigation matters.

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