Bermuda-based Professional Lines Unit, a division of XL Group plc (XL), introduced a new insurance product – the Wage & Hour Liability insurance. This new product is intended to specifically cater to the requirements of Fortune 500 companies and other large employers who face employee compensation and classification disputes.
The Wage & Hour Liability insurance protects employers against indemnity liability, and wage and hour claims. Wage and hour claims are associated with accusations like unpaid overtime, employee misclassification and non-payment of minimum wage, which lead to unrest among employees. With the Department of Labor in the U.S. enforcing strict laws regarding such negligence, the companies have to pay millions of dollars to address these claims.
In fact, the burgeoning number of lawsuits associated with the alleged violations of Wage & Hour laws have evolved as the fastest growing litigation activity in the U.S federal and state courts in recent times. Irrespective of whether the allegations are true or not, the companies end up investing a huge amount of time and resources to defend themselves. The new product is tailored to protect the employers against such hassles and manage the risks better.
The new product protects the employers in case of any Wage & Hour law violation. For large employers with more than 10,000 employees the product addresses and mitigates risk issues. Additionally, the Wage & Hour Liability insurance provides coverage for earned wages, private litigation and governmental civil actions, liquidated, statutory and punitive damages as well as fees paid to attorneys.
Through the exclusive product, XL Group will be able to reach out to more clients and write more business going forward.
In the first quarter of 2013, net premiums earned by the Professional Lines Unit of XL Group increased 4.6% year over year to $396.3 million. We expect the professional lines to earn more premiums on account of the new product, thereby bolstering revenues and hence earnings for XL Group going forward. The long-term earnings growth rate for the company is projected at 7.50%.
Among its other endeavors, the launch of the Motor Truck Cargo coverage Solutions last month appears promising. The Motor Truck Coverage Solutions was introduced by XL Group to strengthen the inland marine business of the company. The coverage caters to the mid-to-large sized trucking business in North America.
XL Group currently carries a Zacks Rank #2 (Buy). Among others in the industry, American Safety Insurance Holdings Limited (ASI), Markel Corporation (MKL) and State Auto Financial Corporation (STFC) carry a favorable Zacks Rank #1 (Strong Buy) and appear impressive.
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