Insurance Journal Forums

Dear All,

I was wondering if any of you have ever came accross this question. My insured owns a hostel, a boarding house for foreign students. Yesterday he called me and asked seemingly innocent question: Am i covered if my guest would file a law suit for discrimination. i.e he didn't get to stay at the hostel because of guest's color, sex, gender?
At first I said you are covered under Personal Injury but then I start second guessing myself. What do you think? And if it's not covered how to close this gap in coverage?

I don't think it's covered by a standard CGL's personal injury coverage. Personal injury covers specific "offenses" such as false arrest, malicious prosecution...and discrimination is not one of them. The insured might get some coverage if they have an EPLI or D&O policy with "Third Party Claim" Coverage. I'd suggest you get a sample policy and review it.

There are Tenant Discrimination policies available, which are typically part of a property management E&O policy. However, they are much more common for landlords subject to Fair Housing Rules. It would seem an EPLI policy or a Miscellaneous Professional E&O policy with third party coverage endorsement would be the sure-fire way to provide coverage.

If there is an actual claim, you may want to turn it in as an incident on the CGL policy anyway - or at least get a Reservation of Rights Letter. Sometimes, the language of a lawsuit (assuming there is one) is crafted by an attorney with knowledge of basic CGL forms, and they will use specific language to trigger coverage.

Evanston's Tenant Discrimination Policy would take care of this exposure. Premiums start at $2,000 for a $1MM limit. They would require that the these be for long term rental (at least 9-12 months). Let me know if you would like me to forward you an application.

Regards,
Cindy
cindyb@monarchexcess.com

Thanks Cindy, I don't think it will fit because it's a hostel and people usually stay up to a week or two weeks to most.

Cindy Blazer wrote:Evanston's Tenant Discrimination Policy would take care of this exposure. Premiums start at $2,000 for a $1MM limit. They would require that the these be for long term rental (at least 9-12 months). Let me know if you would like me to forward you an application.

Regards,
Cindy
cindyb@monarchexcess.com