Short answer
Employment and cyber claims often fall outside a business owners policy (BOP) and professional liability policy. Employment disputes generally belong under an employment practices liability (EPL) policy. A hacked email account is often a cyber claim. Report right away to every policy that might apply, because coverage depends on the wording of each policy.
Which policy covers a threat from a fired employee?
An engineering subconsultant on a public transit project fired an employee for cause. The former employee then threatened to release documents about the client’s work. On its lawyer’s advice, the firm reported to its BOP carrier and preserved its records.
The BOP carrier reserved rights, which means it was handling the matter but hadn’t agreed that everything was covered. It isn’t a denial. The carrier also noted that a BOP likely isn’t the right policy and recommended notice to the professional liability and EPL carriers.
BOPs generally don’t cover employment disputes, while EPL policies are designed for them. A threat involving a client’s documents may also touch professional liability, so many firms report to each policy that might apply.
Keep your termination documentation, including notes, warnings and the reason for the decision. Preserve related records and avoid deleting anything once a dispute starts.
Is a hacked email account a cyber claim?
It often is. A design-build owner’s email account was taken over, and phishing invitations went out to the owner’s contacts. The broker sent the cyber policy and the claims contact the same day.
The intake asked several questions:
- When did the problem start, and when was it found?
- Which accounts were affected?
- Was any data or money taken?
- Were IT forensics or police involved?
Report as soon as you notice a problem. Cyber policies often pay for forensic investigation and for notifying affected contacts, though terms vary. Write down the timeline while it’s fresh, since the carrier will ask for it.
Related questions
Does a BOP cover an employment dispute?
Generally no. BOPs typically exclude employment-related claims. An EPL policy is the usual coverage, so check whether your firm has one.
Should I report an employee threat to more than one carrier?
Many firms do when it’s unclear which policy applies. In the scenario above, the BOP carrier recommended notice to the professional liability and EPL carriers as well.
What should I keep after firing an employee?
Keep termination notes, warnings, performance records and related emails. Preserve them without editing or deleting anything, and ask your lawyer what else to retain.
Do cyber policies cover phishing messages sent from my hacked account?
Often they can, including costs such as forensics and notifying contacts. Coverage depends on your policy’s terms and limits, so report right away and ask your agent how yours applies.