What are the challenges and trends in liability claims that clubs and their officers and directors are facing?
The challenges that the private club Industry is facing now, and into the foreseeable future, continue to escalate, particularly in the area of Director’s & Officers (D&O) and Employment Practices Liability Insurance (EPLI). The large majority of claims within the nonprofit club arena fall under EPL coverage section and the frequency of claims can be mainly attributed to the following causes of action against a club:
- Discrimination, (including but not limited to discrimination based upon age, gender, race, color, national origin, religion, sexual orientation or preference, pregnancy or disability);
- Wrongful dismissal, discharge or termination of employment;
- Harassment (including sexual harassment whether “quid pro quo”, hostile work environment or otherwise);
- Retaliation, which would include the insured’s response, or alleged response to the actual or attempted exercise by an employee of any right that such employee has under law, including rights under workers compensation laws, the Family and Medical Leave Act, the Americans with Disabilities Act or any other law relating to employee rights;
- Wage & hour claims;
- Wrongful failure to employ or promote;
- Employment-related libel, slander, humiliation, defamation or invasion of privacy.
In addition, non-employment (third party) discrimination claims are on the rise. These would include claims from members, vendors or suppliers. Given the fact that the frequency of claims does not appear to be abating any time soon, clubs can continue to expect a marketplace where insurance carriers change their appetite for business, either moving pricing and retentions progressively higher, shrinking their portfolio of exposure by non-renewing unprofitable business, or pulling out of the market altogether.
Note: Truly private clubs are exempt from certain workforce laws and regulations and are thus granted protection when facing allegations related to those rules. See the privacy checklist.
Tom Walker is area executive vice president for RPS-Bollinger—Sports & Leisure. He has served on several club boards and committees, and is a recognized authority on club insurance issues. He can be reached at 800-446-5311 (ext. 8098) or [email protected].