California employers have enjoyed a rather extended soft market for insurance rates, pretty much across all lines of insurance for a half dozen years. Rates each year at policy renewals have been flat or in a few percentage points plus or minus range.
The exception that has begun to stand out is Employment Practices Liability insurance. This is the coverage that addresses “workplace wrongs” such as wrongful termination, discrimination or harassment.
Many policies marketed in California included a sub-limit of coverage for defense costs related to “Wage & Hour” claims. This has become a welcome benefit for employers who have been hit with claims alleging the employees were not given appropriate breaks or lunch hours, and weren’t paid overtime when applicable. Exacerbated by media advertising of law firms encouraging workers to call if they think they weren’t paid properly, the frequency of such claims has grown substantially.
Additionally, anytime the economy turns downward and there are large layoffs, desperate ex-employees look for areas to add to their “exit package” by filing claims for wrongful termination, or other allegations.
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