At issue in the ruling was the 180-day statute of limitations applicable "after the alleged unlawful employment practice occurred"—in this case discrimination as respects compensation based on gender. Ledbetter had claimed that each check issued is an act of discrimination; the court held that the statute of limitations for presenting an equal-pay lawsuit begins at the date the pay was agreed upon, not at the date of the most recent paycheck.

Authors of the minority opinion felt, however, that compensation amounts are nearly always confidential—not available for comparison among employees, difficult to determine and occurring in small increments over long periods of time. Thus, they concluded that the 180-day statute should not apply in the Ledbetter case.

Enter the Lilly Ledbetter Fair Pay Restoration Act of 2009, signed into law by President Obama in one of his first official acts [Ledbetter is standing over Obama's right shoulder in the photo]. The law restarts the statute of limitations with each check issued on a discriminatory basis. The impact of this legislation is sure to be felt for years to come.

Unknown Perils

One concern is simply the degree to which small and midsize business owners and nonprofit entities are aware of the above example and other such changes in local, state or federal laws enhancing the rights of their employees within the legal system—one suspects that most are not.

So now more than ever, there is a need to promote the purchase of EPLI for an employer's protection. It could be the most important insurance purchase a business owner makes today.

Even though employers today are many times more conscientious than in the past when it comes to employee policies such as gender and diversity issues, sexual harassment, and discrimination, they should also realize that:

• Employees are increasingly aware of their rights under the law.

• Even when an employee's case might seem to be groundless and without merit, lawsuits can be quite expensive and time-consuming for smaller business owners.

When agents and brokers take the time to explain the risks and coverages of EPLI, they are very likely to bind the policy. And they have plenty of options to sell as more and more carriers are expanding the availability of this class of business.

Market Movers

To help with marketing the value of the policy, most major carriers can provide examples of prior claims and the amounts paid for either defense, settlement or both. Or they can provide equally important examples where the employer won his or her case but still had a large legal bill.

Such material can be a real asset in getting an insured's attention. The key is to approach clients with enough examples so that they say, "This might happen to me!"

If feasible, remind a client that uncovered employment claims can severely damage a firm—especially if several employees are involved—and such financial situations can make future operations difficult at best. And if possible, have the client's HR representative present during the sales call, as they are advocates of EPLI.

A final word to any and all prospects for EPLI coverage—consider the form being purchased. In particular, beware of purchasing solely on premium. For example, it pays to see if the carrier offers a helpline for employment issues. This service can be invaluable in navigating the legal minefield of employment relations.

As we saw in the case of Lilly Ledbetter, employment law is continually evolving. What appears a non-issue today might not be tomorrow—so explain to your clients they can prepare for the unexpected with EPLI coverage.