1. Forms
2. EP
3. EP-01-36

What the Form Is

The EP 01 36, titled "Amendment of Coverage Territory - Additional Scheduled Countries," is an endorsement used with an Employment-Related Practices Liability (EPL) insurance policy. Its primary function is to expand the geographical area where the policy provides coverage. Specifically, it adds countries listed in the endorsement's schedule to the standard coverage territory (which typically includes the United States, its territories and possessions, Puerto Rico, and Canada). The endorsement clarifies that for wrongful acts occurring anywhere in the world, the policy will respond as long as the claim or suit is brought within the United States, its territories or possessions, Puerto Rico, Canada, or one of the countries specifically scheduled in this endorsement.

Classes of Business It Applies To

This endorsement is relevant for any business or organization that has employment-related exposures in foreign countries. This includes, but is not limited to:

• Multinational Corporations: Companies with offices, subsidiaries, or a significant number of employees located in countries outside of the standard policy territory. For example, a U.S.-based manufacturing company with a plant in Mexico and a sales office in Germany.
• Companies with International Assignees: Businesses that send employees on short-term or long-term assignments to other countries. For instance, a consulting firm that deploys consultants to client sites globally.
• Organizations Recruiting Internationally: Entities that hire employees from or advertise positions in foreign countries, which could lead to employment-related claims subject to foreign jurisdictions (though the suit must be brought in the defined territory). An example would be a research institution hiring scientists from various countries.
• Businesses with Remote International Workforce: Companies employing individuals who work remotely from foreign countries.

Special Considerations

• Scheduled Countries: It is crucial that all countries where coverage is intended to be extended are accurately listed in the endorsement's schedule.
• Suit Provision: A key aspect is that while the wrongful act can occur anywhere, the legal suit must be brought within the defined, expanded coverage territory for coverage to apply. This means if a suit is brought in a country not listed in the schedule and not part of the base territory, the policy may not respond.
• Defense in Foreign Jurisdictions: The endorsement addresses situations where the insurer may be prevented by law or for other reasons from directly handling the defense in a scheduled foreign country. In such cases, the insured may have to manage their own defense, with the insurer reimbursing defense costs, subject to the policy's limits and other terms.
• Conflict of Laws: Employment laws vary significantly from country to country. This endorsement does not alter the local laws applicable to an employment dispute but expands the territory where a suit covered by the policy can be brought.

Key Information for Agents and Underwriters

• Risk Assessment: Underwriters must carefully evaluate the employment laws, legal environments, and cultural nuances of each country proposed for scheduling. The potential for employment litigation and the nature of such litigation can differ vastly.
• Pricing: The premium for this endorsement will be influenced by the specific countries added, the number of employees in those locations, the insured's prior international claims history, and the overall risk profile of operating in those territories.
• Underwriting Information: Detailed information about the insured's international operations, including employee count per country, nature of operations, HR policies for international employees, and any history of foreign employment claims, will be required.
• Coverage Scope: Agents should clearly explain the “suit brought in” provision to clients, ensuring they understand that this endorsement does not provide universal coverage for suits brought in any court worldwide, only those within the expanded territory.
• Coordination with Other Policies: It's important to review if the insured has any local EPL or Directors and Officers (D&O) policies in the foreign countries and how this endorsement would interact with them to avoid gaps or overlaps.