1. Forms
2. EP
3. EP-01-34

What the form is

The EP 01 34, titled "Amendment of Coverage Territory - Worldwide Coverage," is an endorsement to an Employment-Related Practices Liability (ERPL) insurance policy. Its primary function is to broaden the geographical scope of coverage from the typically defined territory (often the United States, its territories and possessions, Puerto Rico, and Canada) to provide coverage for claims originating from wrongful acts occurring anywhere in the world. However, the claim or suit must still be brought within this newly expanded worldwide coverage territory.

Classes of business it applies to

This endorsement is particularly relevant for businesses with international operations or employees who travel or are stationed abroad. Examples include:

• Multinational corporations with offices or subsidiaries in foreign countries.
• Companies that send employees on international assignments.
• Businesses that recruit or employ individuals who may reside or work in different countries.
• Organizations that could face employment-related allegations (such as discrimination, harassment, wrongful termination) stemming from their global activities. For instance, if a U.S. company has a sales office in Europe and an employee there alleges wrongful termination, this endorsement would help ensure that the ERPL policy could respond, assuming the suit is brought in a covered territory.

Special considerations

When considering or applying this endorsement, several points are important:

• Suit Provision: While the wrongful act can occur anywhere, the policy typically still requires the suit to be brought within the defined coverage territory (which this endorsement expands to worldwide). This is a critical detail to understand.
• Local Laws and Regulations: The employment laws and legal environments of foreign countries can vary significantly from those in the U.S. This can impact the nature of claims, the cost of defense, and potential settlements or judgments.
• Insurer's Ability to Defend: The practical ability of the insurer to investigate and defend a claim in certain foreign jurisdictions should be considered. Some countries may have legal systems or logistical challenges that complicate defense efforts.
• Interaction with Other Policies: It's important to understand how this worldwide coverage interacts with any local insurance policies the insured may have in foreign countries (e.g., a local Directors & Officers or employment practices policy).
• Alternative Endorsements: Insurers offer variations of territory endorsements. For example, EP 01 35 provides worldwide coverage *except* for specified countries, and EP 01 36 expands coverage to additional *scheduled* countries. The choice of endorsement should match the insured's specific international footprint.

Key information for agents and underwriters

For Agents:

• Thoroughly assess a client's international exposures, including the locations of employees, offices, and the nature of their overseas operations.
• Explain the distinction between where a wrongful act can occur and where a suit must be brought.
• Discuss the potential need for this endorsement if any international exposure exists, even if it seems minor.

For Underwriters:

• Evaluate the increased risk associated with worldwide operations. This includes considering the legal and regulatory environments of the countries involved.
• Inquire about the insured's policies and procedures for managing employment practices in their international operations.
• Pricing for this endorsement should reflect the broadened scope of coverage and the potential for higher defense costs or different liability standards in foreign jurisdictions.
• Clarify if the insured has employees in countries with particularly complex or litigious employment law landscapes.