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18 W. New Eng. L. Rev. 71 (1996)
Employers' Liability and Errors and Omissions Insurance Coverage for Employment-Related Claims

handle is hein.journals/wnelr18 and id is 77 raw text is: EMPLOYER'S LIABILITY AND ERRORS AND OMISSIONS INSURANCE COVERAGE FOR EMPLOYMENT-RELATED CLAIMS JAMES E. SCHEUERMANN JOHN K. BAILLIE* INTRODUCTION Today the specter of employment-related claims1 haunts cor- porate board rooms throughout the country. The pervasiveness of such claims, and the large awards that have been made to claim- ants,2 have led employers of all types to seek insurance coverage for employment-related claims under many different types of liability policies. Corporate policyholders often mistakenly assume that they must bear the full costs of the defense and liabilities of an em- ployment-related suit. In fact, when applying policy language and well-established rules of insurance law, many courts have found in- surance coverage for defense costs or liabilities associated with em- * James E. Scheuermann and John K. Baillie are attorneys at the law firm of Kirkpatrick & Lockhart, LLP, in Pittsburgh, Pennsylvania, where they counsel and liti- gate on behalf of policyholders concerning insurance coverage matters. This Article reflects the views of the authors as to the identification of important issues in third- party liability coverage for employment-related claims but does not necessarily reflect their views as to the resolution of these issues. Moreover, this Article does not neces- sarily reflect the views of any client of Kirkpatrick & Lockhart, LLP, or the firm itself. Portions of this chapter previously appeared in James E. Scheuermann, Insurance Coverage for Employment-Related Claims, 28 TORT & INS. L. J. 778 (1993), and in James E. Scheuermann & John K. Baillie, Liability Insurance for Employment-Related Claims, in lB THE LAW OF LIABILITY INSURANCE (Rowland H. Long ed. Matthew Bender 1995). Both of these articles comprehensively discuss liability insurance cover- age for employment-related claims. The p6rtions that appeared in THE LAW OF LIABIL- rry INSURANCE are reprinted with the permission of Matthew Bender & Co., Inc. © 1995. All rights reserved. 1. As used in this Article, employment-related generically refers to liabilities, acts, or claims arising in connection with employment discrimination, wrongful termina- tion, constructive discharge, sexual harassment, and similar conduct. It does not refer to liabilities and claims for work-related injuries that may be covered under workers' compensation statutes. 2. See, e.g., Shoney's Inc.: Judge Approves Settlement of Racial Bias Lawsuit, WALL ST. J., January 26, 1993, at B4 (reporting that a U.S. district court judge approved a $105 million settlement in a racial discrimination suit against Shoney's, Inc.).

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