California Auto Dealer

Although EPLI coverage carriers will typically tell you they do not provide any coverage for PAGA claims, a recent Court of Appeals ruling, Southern California Pizza Co. LLC v. Certain Underwriters at Lloyds, G052643 8/27/19 modified 9/20/19, held that an exclusion for wage and hour claims in an Employment Practice Liability (EPL) policy was ambiguous. Specifically, the Court interpreted wage and hours laws to mean laws concerning duration worked and/or remuneration received in exchange for work, but not for claims for reimbursement of expenses incurred, such as failure to reimburse employees for use of their own tools. So there was a duty to defend under the EPLI coverage. In that case, the Court ruled that the $250,000 defense cost cap for wage and hour claims did not apply. If you were involved in a PAGA claim over the last four years (unless your policy has its own statute of limitations) and either did not have coverage for wage and hour claims, or had only limited coverage, you may be entitled to payment by your insurance company. Case law also provides that if part of a claim is covered, the insurance company has a duty to defend the entire claim.