Employment Practices Liability Policy (Prior to January 1, 2003)  

Originally Adopted by MVRMA Board:  12/11/00

Amended: 12/16/02

PURPOSE

The purpose of this policy is to define the limits and the scope of liability for which MVRMA would be financially responsible in the event a claim with an occurrence date prior to January 1, 2001, is asserted against a member or any individual the member is obligated to indemnify or defend alleging an event which may result in the imposition of liability as a result of an employment practice.

COVERAGE STATEMENT

MVRMA agrees to indemnify and defend, subject to the limitations set forth herein, any claim asserted against a member or any individual the member is obligated to indemnify or defend arising out of an employment practice when MVRMA’s excess insurance carrier, USF&G, determines that no coverage is available under its policy for said claim.

MVRMA’s obligation to indemnify and defend shall be limited to those claims for which coverage would be available under the Employment Practice Liability (EPL) insurance policy purchased by MVRMA for its members through American International Group (AIG), with an effective date of January 1, 2001.  In other words the AIG Employment Practice Liability insurance policy purchased by MVRMA with an effective date of January 1, 2001 shall define the nature and extent of coverage which MVRMA is willing to afford its members for those claims which occurred prior to January 1, 2001.

For claims prior to 1997, MVRMA’s limit of liability will be $1,000,000.  For claims from January 1, 1997 to December 31, 2000, MVRMA’s limit of liability for each claim will be eleven million dollars ($11,000,000).  All costs associated with the investigation, defense of any such claim, as well as any indemnity payment to resolve any such claim, shall be included within this limit.

The current program offered by MVRMA to its members reinsures EPL coverage through the NPX program (effective 1/1/1997) with limits of ten million dollars ($10,000,000) after the exhaustion of a one million dollar ($1,000,000) threshold, subject to the terms and conditions of the NPX treaty.

Thus, the exposure to the MVRMA loss reserve fund for any claim would be limited to one million dollars ($1,000,000).