The Connecticut Supreme Court in its coverage decision regarding National Waste Associates LLC vs. Travelers Casualty & Surety Inc., upheld Travelers' denial of coverage for a wrongful discharge lawsuit based on the prior and pending litigation exclusion, as it applied to a prior "administrative proceeding" filed by the employee for unemployment
compensation benefits. 

In response to the outcome of National Waste Associates LLC vs. Travelers Casualty & Surety Inc., Monitor now offers an endorsement modifying the Prior and Pending Litigation Exclusion for the Employment Practices and Management Liability Insurance policies relating to the filing of unemployment benefits sought before the Prior and Pending Litigation Date of the policy.

Monitor will not consider an employee's filing for unemployment benefits before the Prior and Pending Litigation Date as an "administrative proceeding" for purposes of determining coverage under the policy.

Case Details

On January 19, 2010, the Connecticut Supreme Court published a decision regarding National Waste Associates LLC vs. Travelers Casualty & Surety Inc. National Waste Associates was sued by a former employee for wrongful termination during the policy period. National Waste submitted the claim to its carrier, Travelers Casualty & Surety. Under the terms of its Employment Practices Liability policy, Travelers denied the claim, citing a previous unemployment compensation hearing as an "administrative proceeding" under their prior and pending litigation exclusion. The court agreed that as the employee had filed a claim for unemployment benefits before the policy period, the policy should not cover the lawsuit filed during the policy period. 

*Based on a manuscript endorsement – state approvals pending.

Links Related to this Case

EPL Insurance: A "Surprise" Coverage Decision by Kevin LaCroix

Employment Practices Liability Insurance: Surprise Coverage Interpretation by www.murthalaw.com