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With the passage of power to the new Trump administration, enforcement of laws prohibiting illegal immigration will likely ramp up dramatically as compared with the Obama administration. Accordingly, many more businesses can soon expect to receive unannounced "visits" by US Immigration and Customs Enforcement (ICE) agents.

Given this new environment, insureds should request that their insurers add an "Immigration Coverage Extension" (also termed an "Immigration Investigation Defense Expense Sublimit" and a "Sublimit for Immigration Claims Endorsement") to their employment practices liability insurance (EPLI) policies.

Essentially, these endorsements cover "wrongful immigration acts," which are actual (or alleged) violations of the Immigration Reform and Control Act of 1986 (or any similar state or federal laws) that result in "immigration claims." Such claims normally involve the costs of defending against criminal investigations of insureds by various governmental agencies. These investigations are usually in response to the alleged hiring or harboring of illegal aliens.

The need for such coverage arises from the fact that there are substantial immigration-related exposures not covered by standard EPLI policy forms. More specifically, standard definitions of "employment-related wrongful acts" do not entail the defense costs necessitated by ICE investigations, arrests, and prosecutions.

Coverage amounts offered under immigration endorsements typically range from $25,000 to $100,000. The endorsements are written on a sublimited basis, meaning they add no additional coverage limits to the policy. Thus, if an EPLI form with a $1 million limit contained a $50,000 immigration investigation coverage extension, payment of that amount would reduce available limits (for all other covered, garden-variety employment losses) to $950,000.

While the vast majority of insurers writing EPLI policies offer some version of this endorsement, not all automatically include it when they provide coverage. Often, insureds can obtain it only by requesting the extension.

Although many businesses have at least some exposure to the kinds of losses addressed by immigration coverage endorsements, companies engaged in food processing, construction, and agriculture are especially vulnerable to such claims.
Posted 8:00 AM  View Comments

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