Expense Reimbursement Claims Are Covered By Employment Practices Insurance
Lloyds of London provided the employer in this case with an employment practices liability insurance (“EPLI”) policy, which contained an exclusion relating to “wage and hour or overtime law(s).” In this insurance coverage dispute, the employer alleged the policy exclusion is narrower in scope than Lloyd’s contended.
The trial court sustained the insurer’s demurrer to the complaint, but the Court of Appeal reversed, holding that “we conclude many of the disputed underlying lawsuit claims are potentially subject to coverage.” Specifically, the Court held that claims in the underlying lawsuit involving failure to reimburse delivery drivers for mileage expenses (Cal. Lab. Code §§ 2800 and 2802) fall outside the EPLI policy’s wage-and-hour exclusion, as do the derivative claims for violation of Cal. Bus. & Prof. Code § 17200 and the PAGA.