Insurance Coverage of Employment Discrimination Claims

This article discusses insurance coverage of employment discrimination claims under both existing policies and emerging Employment Practices Liability Insurance policies: The first part describes the “three *7 dimensional model” of liability insurance; the second part describes general principles of interpretation as applied by courts to insurance policies; and the third part describes public policy limitations on the interpretation of insurance policies. These first three sections establish the background necessary for analyzing the availability of insurance coverage for employment disputes. The fourth part of the article then analyzes the potential for coverage under standard types of liability insurance, while the fifth part describes the duties which arise in the event of coverage. Finally, the last part describes the relevant considerations that a discrimination claimant may wish to take into account when framing a complaint against the employer. The article concludes by suggesting that the coverage battles of the 1990\u27s may slowly wind down, but that equally interesting and difficult issues may arise under newer policy forms. Additionally, I suggest that the existence of insurance may have a more profound regulative effect on the behavior of employers than the anti-discrimination statutes that create the underlying liability