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Survey Report

Insurance Marketplace Realities 2020 Spring update – Employment practices liability

Talent|Workers Compensation|Financial, Executive and Professional Risks (FINEX)
COVID 19 Coronavirus

May 7, 2020

There is a societal shift in focus on workplace culture. A workplace that promotes inclusion and diversity may minimize exposure to employment-related claims.
Rate predictions
  Trend Range
Primary (domestic markets) Increase (Purple triangle pointing up) +5% to +20%
Excess Flat to increase Flat to +5%
California Increase (Purple triangle pointing up) +5% to +20% (higher for certain industries)
Bermuda markets Increase (Purple triangle pointing up) +5% to +10% with minimum retentions of $1m

Key takeaway

There is a societal shift in focus on workplace culture. A workplace that promotes inclusion and diversity may minimize exposure to employment-related claims.

California exposure continues to be the most difficult to underwrite.

  • While overall primary rates are rising in the +5% to +20% range, this can be higher for certain industries, e.g., health care, tech and retail.
  • More prominent than rate increases are the increases in retentions and cutting back of limits, with most markets having minimum retentions of $250,000 for California claims and separate retentions for high-wage earners, particularly in the financial institutions industry.
  • California exposure continues to be more difficult to underwrite because of employee-friendly legislation and a plaintiff-friendly judicial system.

Socially driven issues may increase exposure to employment practices liability litigation.

  • A few years ago, the start of the #MeToo movement caused a spike in employment claims, specifically, sexual harassment. While those claims continue, they are not coming in as frequently.
  • Since then, we have seen a rise in employee activism, where employees are pushing their employers to take a stance on issues such as workplace harassment and pay equity.
  • The COVID-19 pandemic may lead to employment claims involving such issues as discrimination, invasion of privacy and retaliation.
  • The claims arising out of these global issues are typically covered by EPL policies.

Increased privacy protections lead to significant class action claims.

  • The Illinois Biometric Information Privacy Act (BIPA) has been the subject of many class action claims against organizations with employees in the state. BIPA prohibits an entity from collecting, capturing, purchasing or otherwise obtaining a person’s “biometric identifier” or “biometric information,” unless it satisfies certain notice, consent and data retention requirements. BIPA also provides for a private right of action.
  • Losses for BIPA class action claims are in the millions, leading many EPL carriers to reconsider the coverage.
  • With other states considering enacting similar legislation (and Florida, Massachusetts and New York contemplating private right of action legislation), many EPL policies now have a conditional exclusion for BIPA claims, with some expanding even further than BIPA.

State legislation is providing more protection for employees.

  • As society focuses more on inclusion and diversity, states are implementing laws that provide broader protections to employees.
  • For example, some states have new hairstyle discrimination laws, some have loosened the standard for sexual harassment claims, and some have extended the statute of limitations for harassment and discrimination claims.
  • These changes are driving some of the upward rate movement in the market and putting pressure on retentions and limits.


Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.

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