Navigating the EPLI Maze.

• Author: Gassmann, Michael L.
• Position: Review

Published by Bowne & Co. Inc., New York, 41 pages, $10.00

REVIEWED BY MICHAEL L. GASSMANN

Few types of insurance have grown as rapidly - and evolved as quickly - as employment practices liability (EPL) insurance. Since the early 1990s (when Title VII of the Civil Rights Act of 1964 was amended to allow victims of discrimination to recover compensatory and punitive damages), most property and casualty insurers have developed one or more EPL products.

From an employer's perspective, EPL insurance has become an increasingly important part of a risk management program. But the proliferation of policies can be bewildering, particularly to employers and risk managers who may be inexperienced in analyzing and comparing professional liability insurance policies.

Stephen Weiss, who is a partner in the Washington, D.C., office of the law firm of Holland & Knight LLP, offers the prospective buyer of EPL insurance needed guidance in his new book, Navigating the EPLI Maze: A Handbook for Purchasers of Employment Practices Liability Insurance. Weiss emphasizes practical advice. He assumes that the reader is not expert in the interpretation and negotiation of insurance policies, and explains - without any more jargon than is absolutely necessary - what the prospective purchaser of EPL insurance should look for.

One of the first decisions a buyer of EPL insurance must make is what type of coverage to buy. EPL insurance is available in several formats - as a stand-alone policy, as an endorsement to a D&O policy, and as part of a combined EPL/D&O policy. Weiss gives a straightforward analysis of the pros and cons of these formats.

He advises - wisely, I think - that prospective buyers take into account factors other than cost. Weiss correctly observes that combining D&O and EPL coverages carries with it the risk that an EPL loss could dilute or exhaust the insureds' D&O protection, and vice versa. He also points out that EPL endorsements to D&O policies often afford less coverage than stand-alone EPL policies.

Weiss urges buyers of EPL insurance to be sure that the coverage they plan to purchase is "up to the task expected of it" and advises that a decision to purchase combined coverages should not be made lightly: Indeed, Weiss concludes that "fairness to the directors and officers, and internal corporate politics, suggest that this decision should be made at the most senior-officer level and possibly by the board of directors."

Most of Weiss's book is...