Quid Pro Quo – What It Means For Employers
Quid pro quo is Latin for “this for that.” This term pertains to the exchange of values by both parties to form a valid contract. In workers compensation, quid pro quo means that employees trade their right to sue their employers in exchange for no-fault benefits. This is considered the quid pro quo in workers compensation.
In the employment law arena, quid pro quo often means that something is done by an employee in exchange for some form of reward by a supervisor or manager. Quid pro quo events are often the basis of employment practices liability insurance claims that involve allegations of sexual harassment.
Employment Practices Liability Insurance (EPLI) Defined
A type of liability insurance covering wrongful acts arising from the employment process. The most frequent types of claims covered under such policies include: wrongful termination, discrimination, sexual harassment, and retaliation. In addition, the policies cover claims from a variety of other types of inappropriate workplace conduct, including (but not limited to) employment-related: defamation, invasion of privacy, failure to promote, deprivation of a career opportunity and negligent evaluation. The policies cover directors and officers (D&O), management personnel and employees as insureds. The most common exclusions are for bodily injury (BI), property damage (PD) and intentional/dishonest acts.
EPLI policies are written on a claims-made basis. The forms can contain “shrinking limits” provisions, meaning that insurer payment of defense costs—which are often a substantial part of a claim—reduce the policy’s limits. This approach contrasts with commercial general liability (CGL) policies, in which defense is covered in addition to policy limits. Although employment practices liability insurance is available as a stand-alone coverage, it is also frequently sold as part of a management liability package policy. In addition to providing D&O and fiduciary liability insurance, management liability package policies afford the option to cover employment practices liability.
See also Defamation; Discrimination; Directors and officers (D&O) liability insurance; Errors and omissions (E&O) insurance; Fiduciary liability; Management liability insurance; Personal injury (PI); Retaliation claims; Shrinking limits defense provision.
To learn more about quid pro quo or how employment lawsuits involving quid pro quo can be covered by employment practices liability (EPL) insurance, contact ALIGNED.
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