What Is a Wrap-Around Insurance Program?
A wrap-around insurance program is a policy that provides punitive damages coverage for employment practices liability claims. This kind of insurance will assist in covering the expenses if a plaintiff receives a monetary judgment more than compensatory damages to punish a defendant and discourage them from bringing punitive lawsuits in the future.
Understanding a Wrap-Around Insurance Program
Because a wrap-around insurance program is designed to work in tandem with an Employment Practices Liability Insurance (EPLI) policy, it is also known as a wrap-around policy. EPLI provides coverage against employee claims of rights violations by employers. Such cases may be able to bring accusations ranging from wrongful termination to discrimination.
The most usual verdict from these claims is punitive or monetary damages. These are often given out to address various demands, such as pain and suffering, lost wages, and medical expenses.
Employers maintain EPLI policies to protect themselves against potential lawsuit expenses. Employees may sue their company for punitive damages, such as pain and suffering, if workers’ compensation does not sufficiently cover their loss—possibly because they believe their employer’s conduct caused their injury.
EPLI, a primarily required type of insurance, covers this risk and is intended to cover costs not covered by workers’ compensation or general liability insurance. It offers a certain amount of coverage for medical expenses and lost income for workers or their beneficiaries in the event of an injury, illness, or death resulting from their employment.
Employment Practices Liability Insurance (EPLI) limits the amount paid out per employee, per injury, or per sickness.
Different Kinds of Wrap-Around Insurance Plans
The phrase “wrap-around insurance” is used in numerous contexts that do not refer to relationships between employers and employees. When a single policy is deemed insufficient to fulfill present requirements or is not projected to do so in the future, these include supplemental or secondary insurance policies for life and health insurance coverage.
Another kind of wrap-around insurance scheme guards against political risk. Businesses may get this coverage to protect themselves if a foreign government undertakes actions that result in losses to the company. This kind of wrap-around insurance offers protection against deprivation, acts of government, embargo, sanction, partial loss, and forced abandonment.
Particular Points to Remember
The civil court has authority over instances involving punishment. Additionally, unlike in a criminal proceeding, no prosecutor is present, even if there is still a defendant.
Typically, the plaintiff seeks compensation for some monetary loss and must retain legal representation to act on their behalf. In contrast, if a defendant in a criminal case cannot reasonably afford counsel, they may seek one at the state’s expense.
In addition, prison time or a criminal conviction in a civil case is impossible. Additionally, a judge alone hears and determines most civil matters; a jury is seldom involved.
Conclusion
- A policy that offers coverage for punitive damages in the event of employment practices liability claims is known as a wrap-around insurance product.
- Because it “wraps around” an accepted Employment Practices Liability Insurance (EPLI) policy, it is also known as a wrap-around insurance.
- Employers are shielded from monetary losses by EPLI for those not covered by workers’ compensation.
- The phrase “wrap-around insurance” may also be seen in supplementary or supplemental life, health, and political risk insurance plans.
