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After #MeToo, whole industries have been blacklisted by insurers for sexual harassment liability coverage

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A new report from Betterley Risk Consultants, shared with The Intercept, reveals that many of the world's largest insureres will no longer conside whole industries for "employment practices liability insurance" (EPLI), which covers liability from "sexual harassment, sex discrimination, and other employee claims." Ten of the 32 largest insurers will no longer write EPLI policies for financial firms (brokers, investment banks, VCs, etc); eight will no longer sell EPLI coverage to entertainment and media companies. Also blacklisted are law firms, car dealerships, and other industries where "superstars" or "celebrities" or "high-billing rainmakers" have historically been able to get away with bad behavior so long as they continued to perform for the firm. The blacklists mean that insurers that will extend coverage to the affected industry have a seller's market, with customers not able to shop around, and that means muchhigher prices and deductibles and lower caps on coverage; but more importantly, it requires that the companies seeking insurance demonstrate extensive institutional changes to minimize the risk of claims. Companies are being asked to undertake steps like contracting with "confidential outside service for employees to report complaints anonymously" and "circulating anti-harassment policies" and "setting up sexual harassment compliance programs." Insurance is one of the great, largely invisible levers for changing corporate behavior. Companies that can't get insurance face the threat of existential legal crises every day, and if their boards of directors and senior staff can't get coverage, the threat extends to them, personally, as well. But that doesn't mean that markets sort this stuff out automagically. Read the rest

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