Specialist insurer Beazley has launched a new consortium at Lloyd’s to bring increased capacity for wage & hour risks, expanding the choices available to US organisations. This new consortium exemplifies the pioneering role that the London insurance market has played in the innovation of wage & hour coverage in recent years.
Building on Beazley’s long-established expertise in employment practices liability (EPL), and the 2015 launch of Workplace Protect, Beazley’s standalone wage & hour product, the Concorde Consortium will underwrite wage & hour risks on a surplus lines basis.
This coverage specifically covers claims made under the Fair Labor Standards Act (FLSA), which are excluded from most EPL policies. Limits up to $25 million are available for the costs of defending and indemnifying US organisations that are alleged to have violated their obligations under wage & hour law, such as
- the non-payment or under-payment of wages (eg minimum wage, failure to pay meal & rest breaks or overtime)
- the misclassification of a worker’s employment status (eg exempt / non-exempt status or claims made by contractors or “self-employed” workers).
The Concorde Consortium will underwrite on both a primary and excess basis. The Consortium anticipates that the majority of risks will be for organisations with more than 5,000 employees, but its strength lies in its ability to accommodate the needs of organisations with 10,000 or more employees.
The Consortium is led by Beazley whose underwriters will quote and bind 100% of all risks. It complements Beazley’s existing Workplace Protect policy, under which limits of up to $10 million are available. To offer as much flexibility as possible, companies will be able to select either stand-alone wage & hour cover or incorporate it into their EPL policy.
“A wide range of US organisations, whether they are operating through a traditional business model or in the new gig economy, are at risk of wage & hour law suits,” said Wayne Imrie, employment practices liability underwriter at Beazley. “It’s becoming more difficult to navigate employment legislation as the demarcation between employees and non-employees is increasingly blurred and the legislation itself is in a state of flux.”
Mr Imrie continued: “Demand for wage & hour coverage has been the fastest-growing area of EPL. Building on Beazley’s market-leading expertise in this field, we’ve responded by creating the Consortium and designing coverage that plugs the gaps that other coverages fail to offer. By offering additional capacity for the largest risks, we expect to attract more of this business into the London market.”
The other member of the Concorde Consortium is Hiscox, with additional capacity being provided by Beazley’s special purpose syndicate 5623.