EPL

1
EPL EPLI Underwriting Trends Baby Boomers
Come of Age

• Panelists Laura R. Zaroski, Esq.
• Donohue Brown Mathewson Smyth LLC
• Thomas M. Caputo
• Rockwood Programs
• Stuart Ishimaru
• U.S. Equal Opportunity Employment
  Commission
• Catherine Padalino
• Chubb Specialty Insurance
• Paul Siegel, Esq.
• Jackson Lewis LLP

2
Why companies dont buy EPL.and why they should

• The 2005 Chubb Private Company Risk Survey

3
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• The 2005 Chubb Private Company Survey
• Commissioned independent study and interviewed
  451 privately held U.S. companies to
• Gain better insight into level of concern about
  management liability risks
• Measures taken to mitigate these exposures
• Incidence of events that were triggering
  litigation
• Financial impact of this litigation and other
  risk events

4
Asked questions around

• Management liability risks involving
• Directors Officers Liability
• Employment Practices Liability
• Fiduciary Liability
• Crime Insurance
• Miscellaneous Professional Liability
• Workplace Violence
• Kidnap/Ransom Extortion

5
2005 Chubb Private Company Risk Survey

• 67 of companies likely to broaden their product
  offerings.
• 20 plan to reduce or eliminate some employee
  benefits.
• 21 plan to reduce their workforce.

6
Employment Practices Findings
7
EPL lawsuits are common
35
Companies experiencing an EPL charge or lawsuit
in the past five years
According to the 2005 Chubb Private Company
Risk Survey
8
Small businesses have been sued
44
Companies with 50 to 249 employees experiencing
an EPL charge or lawsuit in the past five years
According to the 2005 Chubb Private Company
Risk Survey
9
Employment Practices Findings

• 34 reported costs ranging from 11,000 to
  300,000.
• The average cost for this group was

74,400
According to the 2005 Chubb Private Company
Risk Survey
10
Reductions in force and outsourcing plans
continue
Percent planning to reduce work force
in the year ahead
Size of Company25-49 employees50-249 employees
19 22
Percent planning to outsource functions/operations
in the year ahead
Size of Company25-49 employees50-249 employees
27 33
According to the 2005 Chubb Private Company
Risk Survey
11
Employment Practices Findings

• 90 have a written policy banning employment
  discrimination and sexual harassment
• 73 have human resources policies, procedures,
  and training programs to
• help prevent losses
• 64 provide employment discrimination and/or
  sexual harassment training.

12
Are companies financially prepared?
Executives concerned about the financial impact
of an EPL lawsuit
Size of Company25-49 employees50-249 employees
31
51
According to the 2005 Chubb Private Company
Risk Survey
13
Are companies financially prepared?
Do not purchase EPLI
Size of Company25-49 employees50-249 employees
81
54
According to the 2005 Chubb Private Company
Risk Survey
14
Executives may be more at risk than they realize

• An EPL lawsuit can result in significant
  financial loss.
• Executives may mistakenly believe their company
  has insurance coverage elsewhere.
• Litigation against deep pockets is commonly
  seen as means to correct perceived wrongs.

15
EPL 2006 Market Update and Outlook

• 2005 Year of the Class Action
• Headlines Continue
• Recent Data from EEOC and JVR

16
Current Economic Impacts

• Significant merger acquisition activity, which
  often results in layoffs
• Expense driven downsizing
• and outsourcing
• Displaced workers looking for evidence
• of adverse discriminatory impacts
• We expect a possible surge in age
• and race discrimination claims

17
EPL 2006 Hot Topics

• Wage and Hour
• Panel Counsel issues
• Pending and Prior Litigation