Since the #MeToo hashtag was introduced in 2017, it’s become a touchpoint illustrating the ubiquity of sexual misconduct, abuse, and assault. Much of the conversation turned to impropriety that transpired within the workplace, and many employers became fearful that they could be the next target of a claim. The insurance industry caught wind of this worry and responded with new coverage and policies intended to protect employers from such claims. One such type of policy — abusive acts insurance — offers coverage to employers who may be vulnerable to claims of sexual harm. Read on to learn what insurance covers abuse and when is abusive acts insurance needed.
Only Specific Parties Are Covered
One of the first specifications of abusive acts insurance is the scope of coverage that a policy provides. This will vary based on the terms of each individual insurance policy, but many only offer coverage to specific parties in the event of a claim. An employer who invests in abusive acts insurance, for example, may find that it only offers coverage in the event of a claim from an outside party — not an owner or employee of the company. Though this coverage can be valuable, it may leave employers with exposures that can be costly.
Coverage Includes Physical and Mental Harm
Abusive acts insurance policies are often tailored to protect insureds against claims of sexual assault or harassment — though they often include non-sexual instances of abuse, too. In either case, these claims often include details of both physical and mental harm, which is unsurprising. Sexual assault is linked to posttraumatic stress disorder, and a claim stemming from such an incident should take mental injuries into account as well as physical injuries.
Payout Can Include Investigation and Counseling
The coverage for an abusive acts policy can cover a range of different expenses, depending on the nature of the claim and the coverage provided by the policy. If a claim includes an incident of mental trauma stemming from abuse, though, it may incur a payout that covers the costs of counseling and investigation. These are often offered in the form of supplemental payments to reimburse the expenses associated with handling the claim.
Policy Includes a Duty to Defend
Any employer or individual considering abusive act insurance should research whether or not a policy includes a duty to defend. Policies that do feature a duty to defend obligate the insurer to appoint and fund defensive legal representation. This condition is typically only applicable if an insured reports the claim to the insurer in a timely manner and divulges all details. Policies that don’t feature a duty to defend can result in litigation between the insurer and insured in order to secure coverage.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage, we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.