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Two main insurance policies you likely have in place are Directors and Officers (D&O) Liability and Employment Practices Liability (EPL) Insurance.
D&O Liability Insurance provides protection for the personal assets of the executives and Board of Directors of your affiliate, as they are at risk for litigation brought by customers, franchisees and investors from claims of mismanagement or breach of fiduciary duties.
Employment Practices Liability Insurance will cover you for the costs stemming from claims associated with the employment process, including claims of discrimination, sexual harassment, retaliation and wrongful termination.
With this insurance coverage, you are protected from the cost of associated claims. However, to ensure this coverage, you must report claims in a timely fashion.
When to Report a Claim
Report lag, the number of calendar days between when an instance occurs and when it is reported to the insurance carrier, is a common occurrence in D&O and EPL claims. Generally, the shorter the length of report lag, the better, as timely claim reporting is an indicator of a good claims management program.
Unfortunately, we continue to see affiliates report claims late. If a claim is not reported immediately, the claim can be denied. For more information on how to handle a claim, contact Lockton Affinity.