Jim Baffa, Assistant Vice President, Berkley Select Claims, Discusses Changes and Predictions in EPL Claim Trends
In this two part thought leadership series, Berkley Select's Assistant Vice President of Claims gives an informative overview of EPL claim trends that evolved in 2024 and how employers can proactively manage risks this year to reduce the likelihood of employment-related claims.
Jim, tell us a little about your role here at Berkley Select and what sparked your interest in getting into the insurance/claims business.
As Assistant Vice President – Claims, I manage a team of ten adjusters that handle and resolve management and professional liability claims, predominantly EPL, LPL and D&O in connection with small to mid-sized insureds. I also interact on a regular basis with underwriting, operations and compliance partners to address issues that may impact claims and the company’s legal obligations generally.
I never knew what I wanted to do when I grew up. In college, I was interested in liberal arts, but I always thought law school would be interesting. And in law school, I figured litigation was the way to go. When I graduated from law school, I was fortunate to obtain a job as an associate at a prominent boutique firm handling insurance coverage litigation. I loved it, and I’ve enjoyed insurance, claims and litigation ever since. At some point, however, I grew tired of private practice and sought a way to do similar work without the billable hours associated with law firm life. Claims with an insurance company provided that opportunity.
What are some of the trends that are emerging in state-level employment laws and how will this impact employers and their business?
A new California law effective in 2025 will require additional time off for employees who experience a reproductive loss or are victims of a crime or abuse. New laws also protect employees from retaliation when they choose not to attend employer meetings when religion, politics or unions are discussed, and SB 1100 makes it illegal for employers to require a driver’s license, unless driving is a necessary part of the job. Illinois has also been active in this area, as new laws effective in 2025 include caregiver protections, prohibitions on discrimination based on reproductive health decisions and employer meeting attendance, and increased child labor and workplace privacy protections.
Furthermore, beginning with California in 2018, 10 states now have pay transparency laws that require disclosure of salary and other compensation information in job postings. About a dozen other states are considering such legislation, and a handful of local laws are in place as well. Given the historical tendency to avoid discussions of pay, these laws may require significant changes for employers in their recruitment, and failure to appreciate these laws may result in unexpected liability exposure.
Minimum wages are another ever-changing area, and the patchwork of different laws and regulations will continue to present challenges for employers operating in multiple locations. There have also been increases in wage/hour claims, largely due to practical difficulties associated with compliance, such as an inability to accurately monitor employee meal and rest breaks. Employers will need to ensure they are documenting employee work hours as best they can.
What did you see as some noticeable changes in EPL claims in 2024 that you would want employers to know about?
Retaliation claims continue to be more prevalent and are harder to avoid due to human nature. Even innocent behavior may be construed as retaliation by an employee who has just made a complaint or disclosed potentially improper behavior at the workplace. As noted above, wage/hour claims are increasing overall, largely due to the practical difficulties associated with compliance.
EPL claim severity has increased – the average claim costs more to defend, settle or try. Social inflation is real, and it is largely caused by a more plaintiff-friendly and anti-corporate mindset that has only grown stronger in COVID’s wake. Non-economic damages, such as emotional distress, pain and suffering and mental anguish, have resulted in higher awards, largely attributable to social inflation, and such damages are the primary driver of the increased severity.
How can Berkley Select’s EPL insurance help protect employers/insureds from the financial risks associated with employment-related claims?
Every employer should consider carrying EPL insurance. Even the most careful and compliant employers may be subject to EPL claims due to innocent mistakes or the bad acts of their employees, and even non-meritorious claims can cost a small fortune to defend. Berkley Select’s underwriting and claims teams have decades of experience tailoring custom solutions to coverage and claims issues. Berkley Select’s EPL insurance could save employers from these significant and unexpected exposures. The EPL landscape is ever-changing, and employers need an experienced partner in the business.
Stay tuned for the next segment where Jim discusses how employers can proactively manage risks to reduce the likelihood of an employment-related claim, some key factors for an employers to consider when choosing an EPL policy and what direction he predicts EPL claims will trend in 2025.