Between the Lines

A Discussion of Case Law and Statutory Law Affecting Commercial Lines of Insurance


Wage and Hour Liability Coverage?

Defense-Only Coverage May Be Available.

Want Indemnification Too?  The First Five Million’s On You.

Lawsuits alleging violation of statutes regulating overtime wages, tips and other employee compensation, commonly referred to as wage and hour claims, continue to be a significant risk for employers.  Employers’ efforts to find coverage for these claims under Employment Practices Liability (EPL) policies have met with little success.  In 2012, I wrote here, and here, and here about a trio of cases finding no coverage for claims alleging violation of the Massachusetts statute regulating the distribution of tips.

Since then some coverage has become available for these claims.  Very recently, stand-alone policies for wage and hour liability have become available for big employers.  How big?  These policies typically have self-insured retentions in the $5 million range, and offer limits up to $100,000,000.

Not that big?  Smaller employers now may be able to purchase wage and hour coverage for defense costs only, usually with a sublimit, as an endorsement to their EPL policies.  Although this will not pay a damage award or settlement, the cost of defending such claims, which are often brought as class actions, can be significant.

Photo credit: Denise Mattox

About the Author

Harvey Nosowitz – Counsel

Harvey helps clients with commercial litigation, in particular insurance coverage, personal injury and products liability cases.

Please contact him with any questions:
(617) 621-6555.

Posted In: Employment Claims

Find an Attorney