“A record number of 99,947 charges of discrimination were filed against employers in fiscal-year 2011,” says Spunberg, the highest number in the commission’s 46-year history. The EEOC has recovered $365 million on behalf of those who filed the charges, he adds.

The second culprit driving EPLI rates is wage-and-hour litigation, as managed by the Department of Labor’s Wage and Hour Division. The division has increased its staff of investigators, says Spunberg, and expects to see an increase of 12,000 compliance actions over the next fiscal year—a 45 percent increase from 2011.

“We may see dislocation in the marketplace because not all carriers will be willing to provide such aggressive coverage for clients,” Spunberg says. “Whereas a typical yearly increase would be a flat-to-5-percent renewal, we are seeing a firming in the rate environment. In California especially, retentions on pricing are going up, and it is becoming difficult to place coverage.”

In order for underwriters to plan for future rate changes in liability coverage, Spunberg recommends they dig into regulatory issues: “They define the environment in which your clients work and what they can and cannot do to define exposure.”