Leaders Risk ProtectorSM
Public Entity Employment Practices Liability Insurance
("EPL Coverage Section" or "EPL (Public Entity) Coverage Section")
THIS IS A CLAIMS MADE AND REPORTED COVERAGE SECTION AND A THIRD PARTY COVERAGE SECTION
Notice: Pursuant to Clause 1. TERMS AND CONDITIONS of the General Terms and Conditions, the General
Terms and Conditions are incorporated by reference into, made a part of and are expressly applicable to
this EPL (Public Entity) Coverage Section, unless otherwise explicitly stated to the contrary in the General
Terms and Conditions or in this EPL (Public Entity) Coverage Section.
In consideration of the payment of the premium, and each of their respective rights and obligations in this
policy, the Insureds and the Insurer agree as follows:
1. INSURING AGREEMENTS
With respect to the INSURING AGREEMENTS and the DEFENSE AND SETTLEMENT provisions of this
Clause 1. INSURING AGREEMENTS, solely with respect to Claims first made during the Policy Period or
the Discovery Period (if applicable) and reported to the Insurer pursuant to the terms of this policy,
this EPL (Public Entity) Coverage Section affords the following coverage:
COVERAGE A. EMPLOYMENT PRACTICES VIOLATION COVERAGE
The Insurer shall pay the Loss of any Insured, in excess of the applicable Retention,
that arises from any Claim made against such Insured for any Employment Practices
Violation.
COVERAGE B. THIRD PARTY VIOLATION COVERAGE
The Insurer shall pay the Loss of any Insured, in excess of the applicable Retention,
that arises from any Claim made against such Insured for any Third Party Violation.
DEFENSE AND SETTLEMENT
(a)
The Insurer’s Duty To Defend: The Insurer has the right and duty to defend a Suit for a Wrongful
Act, even if such Suit is groundless, false or fraudulent. The Insurer has the right, but not the
duty, to investigate and defend a Claim that is not a Suit.
(b)
Defense Costs: The Insurer shall, in excess of the applicable Retention and in addition to the
Limit of Liability and the Sublimit of Liability for this Coverage Section (unless specifically
stated otherwise in this Coverage Section), pay the Defense Costs incurred in the defense of any
Suit against any Insured. In the event the Insurer investigates or defends a Claim that is not a
Suit or the Insured, with the Insurer’s prior written consent, incurs Defense Costs in connection
with a Claim that is not a Suit, the Insurer shall, in excess of the applicable Retention and in
addition to the Limit of Liability and the Sublimit of Liability for this Coverage Section, pay
such Defense Costs.
(c)
Settlement: The Insurer has the right, with the written consent of an Insured, which consent
shall not be unreasonably withheld, to settle any Claim if the Insurer believes that it is proper.
An Insured may settle any Claim on behalf of all Insureds to which this insurance applies and
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which are subject to one Retention amount where the total incurred Loss does not exceed the
Retention amount.
(d)
When the Insurer’s Duty To Defend Ends: Except as provided in paragraph (c) above, no Insured
may admit liability or settle any Claim or incur any cost or expense without the written consent
of the Insurer. The Insurer’s duty to defend ends if an Insured refuses to consent to a
settlement that the Insurer recommends pursuant to paragraph (c) above and that the claimant
will accept. As a consequence of such Insured’s refusal, the Insurer’s liability shall not exceed
the amount for which the Insurer could have settled such Claim had such Insured consented,
plus Defense Costs incurred prior to the date of such refusal, plus 50% of Defense Costs incurred
with the Insurer’s prior written consent after the date of such refusal; provided, however, such
sum shall not exceed the unexhausted Limit of Liability or the Sublimit of Liability for this
Coverage Section. This clause shall not apply to any settlement where the total incurred Loss
does not exceed the applicable Retention amount.
The Insurer's duty to defend also ends, and the Insurer shall not be obligated to pay any Damages or
Defense Costs, after (1) the Limit of Liability has been exhausted (as provided in Clause 4. LIMIT OF
LIABILITY of the General Terms and Conditions), (2) the Sublimit of Liability of this Coverage Section
has been exhausted (as provided in Clause 4. LIMIT OF LIABILITY of the General Terms and Conditions)
or (3) the Insurer has deposited the remainder of the Sublimit of Liability for this Coverage Section in a
court of competent jurisdiction. In such cases, the Insurer shall have the right to withdraw from the
further defense of any pending Claims and tender control of the defense of such Claims to the Public
Entity.
2. DEFINITIONS
(a)
"Claim" means a:
(1)
written demand for money, services, non-monetary or injunctive relief including, but not
limited to (i) any demand for mediation, arbitration or any other alternative dispute
resolution process or (ii) any request to toll or waive the statute of any limitations; or
(2)
Suit.
However, in no event, shall the term "Claim" include any labor or grievance proceeding, which is
subject to a collective bargaining agreement.
(b)
(c)
"Damages" means compensatory damages, judgments or settlements, including:
(1)
punitive, exemplary and multiple damages (including multiple or liquidated damages awards
under the Age Discrimination in Employment Act and the Equal Pay Act) where insurable by
the applicable law which most favors coverage for such punitive, exemplary and multiple
damages;
(2)
any attorney fees awarded to a prevailing plaintiff’s counsel pursuant to a covered judgment
against an Insured or which the Insurer has agreed to pay as part of a covered settlement of
a Claim against an Insured;
(3)
back pay and front pay; and
(4)
pre-judgment or post-judgment interest on a covered judgment that accrues before the
Insurer has paid, offered to pay or deposited in court that covered part of the judgment
within the Sublimit of Liability for this Coverage Section.
"Defense Costs" means reasonable and necessary fees charged by an attorney appointed by the
Insurer (unless otherwise provided for by this policy), as well as all other reasonable and necessary
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EPL (PUBLIC ENTITY) COVERAGE SECTION
fees, costs and expenses consented to by the Insurer (including the cost of premiums for any appeal
bond, attachment bond or similar bond arising out of a covered judgment, but without any
obligation to apply for or furnish any such bond) incurred in the investigation, adjustment, defense
and/or appeal of a Claim by the Insurer or by an Insured with the Insurer’s written consent.
Defense Costs shall not include: (1) compensation of any Individual Insured; or (2) any fees,
costs or expenses incurred prior to the time that a Claim is first made against an Insured.
(d)
(e)
"Employee" means any:
(1)
past, present or future employee of a Public Entity, whether such employee is in a
supervisory, co-worker or subordinate position or otherwise, including any full-time, parttime, seasonal or temporary employee or any volunteer, but only while acting in his or her
capacity as such;
(2)
individual who is an independent contractor for a Public Entity, but only while performing
services, on behalf of or at the direction of a Public Entity; or
(3)
individual who is leased or contracted to perform work for a Public Entity, but only while
performing services as a leased worker for, or pursuant to a written contract with, a Public
Entity.
"Employment Practices Violation" means any actual or alleged:
(1)
wrongful dismissal, discharge or termination (either actual or constructive) of employment,
including breach of an implied contract;
(2)
harassment (including workplace bullying, sexual harassment whether "quid pro quo", hostile
work environment or otherwise, including "same-sex" sexual harassment);
(3)
discrimination (including, but not limited to, discrimination based upon age, gender, gender
identity or expression, race, color, national origin, religion, sexual orientation or preference,
genetic information, pregnancy, military status or disability);
(4)
Retaliation;
(5)
employment-related misrepresentation(s) to an Employee;
(6)
employment-related libel, slander, humiliation, defamation or invasion of privacy;
(7)
false arrest or false imprisonment;
(8)
wrongful failure to employ or promote;
(9)
wrongful deprivation of career opportunity, wrongful demotion or negligent Employee
evaluation, including the giving of negative or defamatory statements in connection with an
employee reference;
(10)
wrongful discipline;
(11)
failure to grant tenure; or
(12)
with respect to any of the foregoing items (1) through (11) of this definition, negligent
hiring, retention, training or supervision, infliction of emotional distress or mental anguish,
failure to provide or enforce adequate or consistent policies and procedures, or violation of
an individual’s civil rights;
but only if the Employment Practices Violation relates to an Employee of or an applicant for
employment with a Public Entity, whether committed directly, indirectly, intentionally or
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EPL (PUBLIC ENTITY) COVERAGE SECTION
unintentionally.
(f)
"Individual Insured" means any:
(1)
past, present or future elected or appointed official, director, officer, trustee, executive
director or member of a Public Entity, in his or her capacity as such, including any member
of any commission, board or governing body of any department or unit of a Public Entity but
only to the extent such commission, board, department or unit is within an apportionment of
the total operating budget indicated in the Application; and
(2)
Employee; provided, however, an individual who is leased or contracted to perform work for
a Public Entity, or who is an independent contractor for a Public Entity, shall only be an
Individual Insured if such Public Entity provides indemnification to such individual in the
same manner as it provides to such Public Entity’s employees.
(g)
"Insured" means a Public Entity and any Individual Insured.
(h)
"Loss" means Damages and Defense Costs.
(i)
"Public Entity" means each Covered Entity designated as a "Public Entity" in Item 7 of the
Declarations and any commission, board or other unit operated by such Public Entity and within
an apportionment of the total operating budget indicated in the Application.
(j)
"Retaliation" means a retaliatory act of an Insured alleged to be in response to the actual or
attempted exercise by an Employee of any right that such Employee has under law, including,
without limitation, any of the following activities: (1) the disclosure or threat of disclosure by an
Employee to a superior or to any governmental agency of any act by an Insured which act is
alleged to be a violation of any federal, state, local or foreign law, common or statutory, or any
rule or regulation promulgated thereunder; (2) the exercise of rights under worker’s
compensation laws, the Family and Medical Leave Act, the Americans with Disabilities Act or any
other law relating to employee rights; (3) the filing of any claim under the Federal False Claims
Act or any other federal, state, local or foreign "whistle-blower" law; or (4) strikes of an
Employee.
(k)
"Suit" means:
(1)
a civil, administrative or regulatory proceeding for Damages, non-monetary or injunctive
relief, which is commenced by: (i) service of a complaint or similar pleading or (ii) receipt or
filing of a notice of charges;
(2)
an arbitration proceeding in which Damages are alleged and to which an Insured must
submit or does submit with the Insurer's consent;
(3)
an administrative or regulatory investigation by the Equal Employment Opportunity
Commission, or any similar state, local or foreign agency, which is commenced by the filing
of a notice of charges, service of a complaint or similar document of which notice has been
given to an Insured;
(4)
an administrative or regulatory investigation of violations of the Uniformed Services
Employment and Reemployment Rights Act when such investigation is conducted by the
United States Department of Labor, Veterans Employment and Training Service, Justice
Department or Office of Special Counsel and is commenced by the filing of a notice of
charges, service of a complaint or similar document of which notice has been given to an
Insured; or
(5)
any appeal of a Suit described in subparagraphs (1), (2), (3) or (4) above.
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However, in no event, shall the term "Suit" include any labor or grievance proceeding, which is
subject to a collective bargaining agreement.
(l)
"Third Party Event" means any Wrongful Act.
(m)
"Third Party Violation" means any actual or alleged harassment or unlawful discrimination, as
described in subparagraphs (2) and (3) of the definition of Employment Practices Violation, or
the violation of the civil rights of an individual relating to such harassment or discrimination,
when such acts are alleged to be committed against any individual other than an Employee or
applicant for employment with the Public Entity, including, but not limited to, members,
customers, vendors and suppliers.
(n)
"Wrongful Act" means any Employment Practices Violation or Third Party Violation.
3. EXCLUSIONS
This policy shall not cover Loss in connection with a Claim:
(a)
alleging, arising out of, based upon or attributable to any deliberate criminal or deliberate
fraudulent act, error or omission by an Insured; provided, however, the Insurer will defend Suits
that allege any of the foregoing conduct, and that are not otherwise excluded, until there is a
final judgment or final adjudication against an Insured in a Suit, adverse finding of fact against
an Insured in a binding arbitration proceeding or plea of guilty or no contest by an Insured as to
such conduct, at which time the Insureds shall reimburse the Insurer for Defense Costs. For the
purposes of determining the applicability of the exclusion in this paragraph (a), the conduct of
and knowledge possessed by any Individual Insured shall not be imputed to any other Individual
Insured.
(b)
alleging, arising out of, based upon or attributable to bodily injury (other than emotional distress
or mental anguish), sickness, disease, or death of any person, or damage to or destruction of any
property, including the loss of use thereof.
(c)
alleging, arising out of, based upon or attributable to any (1) presence of Pollutants, (2) actual
or threatened discharge, dispersal, release or escape of Pollutants, or (3) direction or request to
test for, monitor, clean up, remove, contain, treat, detoxify or neutralize pollutants, or in any
way respond to or assess the effects of Pollutants.
(d)
alleging, arising out of, based upon or attributable to any Wrongful Act occurring prior to the
Retroactive Date, or any Related Act thereto, regardless of when such Related Act occurs.
(e)
alleging, arising out of, based upon or attributable to any Wrongful Act occurring prior to the
Continuity Date, or any Related Act thereto (regardless of when such Related Act occurs), if, as of
the Continuity Date, an Insured knew or could have reasonably foreseen that such Wrongful Act did
or would result in a Claim against such Insured.
(f)
alleging, arising out of, based upon or attributable to any Wrongful Act, or any Related Acts
thereto, alleged or contained in any Claim which has been reported, or in any circumstances of
which notice has been given, under any policy of which this EPL (Public Entity) Coverage Section
is a renewal or replacement or which it may succeed in time.
(g)
alleging, arising out of, based upon or attributable to any of the circumstances described in any
of the following:
(1)
the refusal, failure or inability of any Insured to pay wages or overtime pay (or amounts
representing such wages or overtime pay) for services rendered or time spent in
connection with work related activities (as opposed to tort-based back pay or front pay
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damages for torts other than conversion);
(2)
improper deductions from pay taken by any Insured from any Employee or purported
Employee; or
(3)
failure to provide or enforce legally required meal or rest break periods;
provided, however, this exclusion shall not apply to the extent that a Claim is for Retaliation.
(h)
for any of the following:
(1)
civil or criminal fines or penalties;
(2)
taxes;
(3)
any amounts for which an Insured is not financially liable or which are without legal recourse
to an Insured;
(4)
employment-related benefits, stock options, perquisites, deferred compensation or any
other type of compensation other than salary, wages or bonus compensation;
(5)
an Insured’s costs and expenses of complying with any injunctive or other form of
equitable relief, including, but not limited to, complying with the Americans with
Disabilities Act, any liability or costs incurred by any Insured to modify any building or
property in order to make said building or property more accessible or accommodating to any
disabled person or any liability or costs incurred in connection with any educational,
sensitivity or other corporate program, policy or seminar relating to a Claim alleging
discrimination or other Wrongful Act; or
(6)
matters which may be deemed uninsurable under the law pursuant to which this policy shall
be construed.
(i)
alleging, arising out of, based upon or attributable to any violation of responsibilities, obligations
or duties imposed by the Employee Retirement Income Security Act of 1974 (ERISA), as amended,
or any similar provisions of any state, local or foreign statutory or common law.
(j)
alleging, arising out of, based upon or attributable to: (1) sexual molestation or (2) sexual abuse
including any alleged direct sexual activity or (3) any allegation relating to the foregoing
exclusions in subparagraphs (1) and (2) that an Insured negligently employed, investigated,
supervised or retained a person, or based on an alleged practice, custom or policy and including,
without limitation, any allegation that the violation of a civil right caused or resulted from such
Damages or Claim.
(k)
alleging, arising out of, based upon or attributable to any actual or alleged contractual liability of
an Insured under any contract or agreement; provided, however,
(l)
(1)
this exclusion shall not apply to liability which would have attached in the absence of such
contract or agreement; and
(2)
the Insurer will defend a Suit alleging breach of a written employment contract.
alleging, arising out of, based upon or attributable to any violation of responsibilities, obligations
or duties imposed by the Fair Labor Standards Act (except the Equal Pay Act) (FLSA), the National
Labor Relations Act (NLRA), the Worker Adjustment and Retraining Notification (WARN) Act, the
Consolidated Omnibus Budget Reconciliation Act (COBRA), the Occupational Safety and Health
Act (OSHA), any rules or regulations of the foregoing promulgated thereunder, and amendments
thereto or any similar federal, state, local or foreign law, amendment to a law; provided,
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EPL (PUBLIC ENTITY) COVERAGE SECTION
however, this exclusion shall not apply to the extent that a Claim is for Retaliation.
(m)
alleging, arising out of, based upon or attributable to the operations or activities of any (1)
schools; (2) airports; (3) seaports; (4) transit authorities; (5) hospitals, healthcare clinics and
other healthcare operations (not including nursing homes); (6) nursing homes; (7) department of
social services, including adult and children protective services; (8) utility authorities; (9) housing
authorities; (10) jails or detention facilities; (11) law enforcement agencies; (12) prosecutor’s
offices; (13) judiciary offices; (14) fire fighting authorities; (15) 911 emergency services,
including dispatchers and operators; and (16) emergency medical services.
(n)
alleging, arising out of, based upon or attributable to any obligation pursuant to any workers'
compensation, disability benefits, unemployment compensation, unemployment insurance,
retirement benefits, social security benefits or similar law; provided, however, this exclusion
shall not apply to the extent that a Claim is for Retaliation.
(o)
alleging, arising out of, based upon or attributable to any strikes, riots or civil commotions.
4. APPLICATION AND UNDERWRITING
The following provision shall apply in addition to the provisions of Clause 19. APPLICATION AND
UNDERWRITING of the General Terms and Conditions:
Severability of the Application: The Application shall be construed as a separate application for
coverage by each Individual Insured. With respect to the Application, no knowledge possessed by any
Public Entity or any Individual Insured shall be imputed to any other Individual Insured. If the
statements, warranties and representations in the Application were inaccurate or incomplete and
materially affected either the acceptance of the risk or the hazard assumed by the Insurer under the
policy, then the Insurer shall have the right to void coverage under this policy, ab initio, with respect
to:
(a)
Loss of any Individual Insured who knew, as of the inception date of the Policy Period, the facts
that were not accurately and completely disclosed; and
(b)
Loss of a Public Entity, if any Individual Insured who is or was the principal executive officer or
financial officer (or equivalent positions) of the Public Entity knew, as of the inception date of
the Policy Period, the facts that were not accurately and completely disclosed.
The foregoing applies even if the Individual Insured did not know that such incomplete or inaccurate
disclosure had been provided to the Insurer or included in the Application.
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