Wrap-Around Insurance Program


DEFINITION of 'Wrap-Around Insurance Program '

Provides punitive damages insurance for employment practices liability claims. A punitive damage is intended to punish a defendant and deter them from not committing an offense again. Punitive damages are meant to cover medical costs, unearned income due to missed work, pain and suffering, and emotional distress, among others. In essence, this insurance protects the policyholder and helps them cover costs related to punitive damages. The validity of this type of insurance has not been tested in court.

BREAKING DOWN 'Wrap-Around Insurance Program '

Also referred to as a wrap-around policy because they "wrap around" the EPLI (employment practices liability) insurance. The EPLI insurance covers employers from claims made by workers who have sued the company for violating their legal rights as employees. These lawsuits could include claims for sexual harassment, breach of employment contract, wrongful termination, discrimination and failure to hire or promote.

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