An untapped resource: risk management services provided through employment practices liability insurance can head off employee lawsuits.

Rate increases and rising retentions have become the norm in the employment practices liability insurance market, leading many insureds to look harder than ever at their insurance programs. Premiums are rising in many professional liability lines, and insureds are concerned about getting the most for their premium dollar. Coverage terms and policy language are the most obvious points of comparison when evaluating EPL proposals.

But there is another, often overlooked, feature that can set programs apart: risk management services. These services offered to insureds by EPL insurers are often vastly underappreciated and underutilized. As this coverage approaches the end of its first decade as a mainstream executive liability insurance product, there have been fewer coverage innovations, and the differences in coverage have become more subtle than in the soft market of the 1990s. In fact, in the face of large losses, many insurers have moved to restrict coverage and limit the use of coverage extensions such as third-party liability.

There are, however, significant differences among the risk management services offered by EPL insurers as well as the approaches insurers take to loss prevention. Many insurers don't do much follow-up post binding, and the quality and scope of services vary widely. Given these differences and the value these services can bring to insureds, no analysis of an EPL proposal is complete without examining the risk management services component.

Initially, EPL risk management services were largely used as marketing vehicles. They were simple products touted at the front end of the sale to help differentiate proposals, but little follow-up was done to ensure the services were delivered to the appropriate individuals once the policy was bound. These early products typically included hotlines staffed by employment attorneys, audits offered R)r free or at a discounted fee, and printed reference material. Usage rates were extremely low and insureds placed little value on the services.

But EPL risk management products have come a long way. While the hotlines are still widely used, many insurers have expanded their offerings by adding Web-based services. One obvious advantage of Internet delivery of risk management materials is the ability to instantly update them. The Web-based programs often include downloadable sample human resources policies and procedures, reference materials and sell" audits. The most comprehensive also include training materials that the insured can use to train employees, managers and supervisors, as well as a way to track who has completed the training.

Evaluating these programs can be tricky. Many EPL risk management programs look alike, but there are some key distinguishing features. Some important questions to ask:

* Is access to the services limited in any way? Many programs limit hotline use to a stated number of hours, as well as the number of employees that can use the training materials. It's important to understand such limitations up front.

* Does the program include any proprietary features or has the insurer purchased it "oft" the shelf"? When was it last updated? Some insurers have added proprietary features such as training and reference materials. Just because two insurers use the same vendor doesn't mean that the programs are the same.

* How does the insurer deliver the risk management services to the insured, post binding? Insurers that offer training on their risk management programs, and try to get the materials to people in the organization who will actually use them, provide a far superior service than those who use them simply as a marketing tool.

* What is the usage rate of the risk management program? If a high percentage of those with access to the program are using it, this speaks volumes about quality of product and effective delivery.

St. Paul Travelers Bond offers risk management services with a product called Risk Management PLUS+ OnlineSM to its EPL insureds. Our experience, with a usage rate consistently higher than the industry average, has shown that training insureds' human resources personnel on the product correlates to a higher usage rate as well as a higher retention rate on renewal business.

EPL policies are a critical, but often overlooked, tool for managing a company's exposure to employee litigation. EPL risk management services can also mitigate that exposure by helping prevent an employee suit from ever being filed. However, these tools are not all created equal. Small differences in EPL risk management tools can add up to a huge difference in their effectiveness.

Carrie Brodzinski is vice president, Executive Liability, at St. Paul Travelers Bond. She can be reached at [e-mail].