In a recent interview with SHRM Online, Partner Shaun Crosner explained that, contrary to what insurers frequently contend, many employment practices liability insurance (EPLI) policies can provide coverage for lawsuits alleging “wage and hour” violations and other violations of the California Labor Code. According to Crosner, many exclusions in EPLI policies are not as broad as insurers contend. He noted that several courts and arbitrators throughout the country have held that common exclusions in EPLI policies do not bar coverage for claims alleging, among other things, failures to reimburse business expenses incurred by employees, provide accurate wage statements, and timely pay wages.
Given the success that insureds have had obtaining coverage for such claims, Crosner stressed that employers should not automatically assume that an insurer’s denial of coverage is correct. “When faced with claims alleging violations of the FLSA and state labor codes, insured employers should view any adverse coverage positions with scrutiny,” said Crosner.
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