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THE UNEXPECTED HAPPENS: Some Fire Districts Are Unprepared to Weather a Loss

Tuesday, November 5, 2019
THE UNEXPECTED HAPPENS: Some Fire Districts Are Unprepared to Weather a Loss

There is a growing realization among many districts that they are not adequately insured.

Fire Districts are making headlines for reputational risks, including theft by fire, harassment claims, discriminatory and unlawful practices that bring negative publicity, and an increased risk of financial losses. Fire districts are discovering that they have gaps in coverage.

A Widespread and Worsening Problem 

Carriers have revealed that the problem of overpaying, but being underinsured has worsened overall. For example, having limits that are too low or mistakenly believing their current insurance provides sufficient coverage for losses such as:

  • EEOC Claims
  • Sexual Harassment
  • Cyber Liability
  • Wrongful Termination

Top Area of Underinsured Coverage

The employment practices liability insurance (EPLI) has increased due to the costs of litigation and costly damage awards. Disputes often cause serious reputational
harm. Employers need to manage their risks and obtain adequate coverage.

One of the biggest trends from 2017 was wage and hours claims; therefore, the U.S. Department of Labor proposed a rule to increase the annual salary threshold for overtime or minimum wage exemptions. While the proposal was invalidated, many states are considering legislation to change how wages are determined. Additionally, the increasing number of wage claims made against employers has caused some carriers to offer blended policies that include normal EPLI coverage alongside wage and hour coverage.

Another trend is an increasing number of high-profile harassment cases at the end of 2017, which caused both employers and employees to focus on workplace harassment. As a result of these cases, social movements such as the “Me Too” movement have begun as a way to draw attention to harassment. Employers should take care to investigate any reports of assault immediately and establish HR best practices to protect employees and reduce EPLI premiums.

Common Gaps in Insurance Coverage


Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.

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