Protect Your Leadership Decisions -
D&O and EPLI coverages

As a participant of the VFW Insurance Program, you’ve taken the first steps to protect your post in case of theft, accidents or damages. There are other dangers to look for, though: issues involving leadership decisions and employees.

Like any business, decisions made by Post leadership regarding the hiring and firing of employees, and even day-to-day activities, can lead to costly litigation. Considering the increasing frequency of these types of suits, it is a genuine concern. Fortunately, the VFW Post Insurance Program has remedies to help you mitigate the cost of litigation through Employment Practice Liability Insurance (EPLI) and Directors and Officers Liability Insurance (D&O). Both coverages help insulate the insured from the costly expense of litigation; most plans are designed to cover the cost of judgments, settlements and defense costs. Other plans may cover fines, penalties and punitive damages; always review your needs with a VFW Post Insurance sales representative before making a decision.

While EPLI and D&O coverages are similar, there are important differences between the two. Many insureds have found it advantageous to add both policy types to their insurance plans to ensure adequate protection for their post. Consider the following scenarios:

Employment Practices Liability Insurance (EPLI)
Sue has worked at the post for 20 years as a bookkeeper. She’s been a valued employee, but, with increased technology, the Post feels the Treasurer can manage the books and no longer has the need for an employed bookkeeper. Sue feels that the Post is letting her go not because they no longer have a need for the position, but because she had a stroke last year and isn’t as efficient as she was when she was younger and healthier. She sues the post for wrongful termination stating that she was fired due to her age and disability, which is discrimination under the EEOC. The post only has a basic Business Owner’s insurance policy, which is most cases, excludes this type of loss. Therefore, the Post has no coverage for defense costs or a settlement if one is awarded. If the Post would have purchased an Employee Practices Liability policy they would have coverage for this claim.

EPLI coverage shelters employers from the cost to defend against sexual harassment, wrongful termination and other employment-related accusations and litigation. These sorts of claims are highly technical and may incur extensive legal bills; with EPLI coverage, not only are the costs of discovery and trial covered, but damages may be covered, as well.   

Directors and Officers Liability (D&O)
John, the Quartermaster of his Post, prides himself on being a skillful trader in the stock market. The Post has been struggling to keep up with expenses, so he decides that to help them get back on their feet, he’s going to invest the balance of their savings account into a big company. One month later the company John invested in goes into bankruptcy. Subsequently, the Post loses all their savings that John invested. When John has to explain to the membership what happened to the Post’s money, several members decide to sue John. After all, it was his poor decision to invest their money in the first place.  If the Post had a Directors and Officer’s liability policy, the policy would pay to defend John and would reimburse him for any amounts he is found legally obligated to pay.

The best way to protect your Post is to keep your insurance portfolio up-to-date. Call the VFW Post Insurance Program today at 800-829-8390 to review your current policy and learn more about D&O or EPLI coverage.

Insurance Program Administered
by Lockton Risk Services
©2007 Lockton Risk Services