wrap-around policy

A wrap-around policy is one that provides only punitive damages insurance for employment practices liability (EPL) claims.

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Such forms are also called offshore wrap-around policies because they "wrap around" an admitted EPL insurance (EPLI) policy, providing coverage only for punitive damages resulting from a claim under the EPLI policy. Most often, the issuing insurer is an affiliated Bermuda company of the EPLI insurer but can also be an unrelated insurer. Although there has been some controversy regarding such policies, their validity has not yet been tested in court.