On October 15, 2017, Alyssa Milano sent the tweet that started a movement: a call for women who had been sexually harassed or assaulted to reply back with the phrase "me too." One year later, the repercussions are still being felt. The effects have been tangible in insurance, particularly regarding employment practices liability (EPL).
The #MeToo movement has caught the attention of decision-makers across the board, and interest in EPL has grown as a way to protect organizations from the consequences of sexual harassment allegations (among other exposures).
With this heightened awareness comes an opportunity for agents in the business of selling EPL insurance (EPLI). Below are several tips agents can use to grow their business in this important and increasingly relevant line of coverage.
Part of the #MeToo movement's power has come from the fact that it seemingly arose out of nowhere, catching many off guard in the process—just as a damaging EPLI claim can do. Agents in the EPLI market should know their facts: according to the Harvard Business Review ("Why We Fail To Report Sexual Harassment" by Stefanie Johnson, Jessica Kirk, and Ksenia Keplinger, October 4, 2016), 71 percent of women do not report sexual harassment. Unlike a clean liability or property claims history, a total lack of reported sexual harassment incidents could actually be a red flag for deeper cultural problems of underreporting.
Some potential EPLI clients may feel that the mandatory arbitration agreements that they require employees to sign will be enough to protect the company from damaging claims. This belief could be particularly prevalent in light of recent employer-friendly legal developments upholding the validity of arbitration agreements and class action waivers under federal law.
However, several states are using the momentum from the #MeToo movement to put laws in place that limit employers' ability to use confidentiality provisions (i.e., with regard to sexual harassment-related settlements) or arbitration agreements. Some of these laws, for example, restrict employers from retracting job offers or otherwise retaliating against employees when they do not sign the agreements. Bottom line: the validity and enforcement of arbitration agreements are a murky subject, rife with conflicts between state and federal law, and such agreements still need the backing of adequate EPLI coverage in order to maximize protection.
Sexual harassment exposures covered by EPLI policies don't always involve employees acting against other employees. EPLI policies can provide protection in two types of third-party scenarios.
While Insuring Agreement A (EPL) addresses the first scenario, Insuring Agreement B (third-party EPL) covers the second. Making potential clients aware of the third-party coverage offered by EPLI policies can be an effective way to sell the value of this coverage line.
Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.