March 2010

When a business with Employment Practices Liability Insurance (EPLI) or Directors and Officers Liability Insurance (D&O) has an employment matter that is turned over to its insurance carrier, the carrier then becomes involved in deciding what law firm will be representing the company’s interests. If WS has already been involved in the matter, the carrier may or may not approve our continued involvement.

WS has worked hard through the years to form relationships with numerous EPLI and D&O carriers to enable us to assist our clients with employment-related matters. Our relationships with these insurance carriers generally fall into one of two categories. The first category is “panel counsel.” When the carrier designates WS as panel counsel, the carrier may assign your case to WS, thus assuring you of our continued representation in the matter. The second category is “pre-approved counsel.” Carriers for which WS is not panel counsel may pre-approve WS to continue to represent your business after the matter has been turned over to the carrier.

However, sometimes the insurance carrier will not allow WS to continue its representation if WS has not been pre-designated as panel counsel or has not been pre-approved as your attorney expressly in the employer’s policy.

The terms of your EPLI or D&O policy give you the right to request an endorsement or rider specifying the law firm you choose to represent and defend your interests. Securing an endorsement or rider naming WS as your designated legal counsel is the best method to assure you that our firm will be able to continue its involvement in your case.

We have several clients that have successfully secured these endorsements and/or riders. In fact, some insurance carriers have encouraged this process – especially since WS’ billing rates are substantially lower than most law firms selected by the insurance companies.

Obviously, this process is your ultimate decision. But, unless WS is specifically endorsed, you just never know if the carrier will allow us to continue your defense. Also, you should know that this endorsement/rider does not obligate you to use WS. The endorsement/rider merely gives you the ability to utilize our talented and experienced litigation team, versus some potentially unknown law firm chosen by your insurance carrier that does not know or appreciate your business philosophies and culture.

For questions or comments concerning this topic, please contact WS Shareholder & Senior Attorney Joseph Laverty in our Davenport, IA office at (563) 333-9102, jolaverty@wesselssherman.com.