EPLI Insurance for Sexual Harassment Challenged on Public Policy Grounds

What is now viewed as no longer a novelty in America - an insurance policy that protects a company from lawsuits based on employment practices - has been challenged by a member of the Israeli Parliament. According to the Jerusalem Post story, Gal-on Petitions JCJ on harassment:

Meretz Chair MK Zehava Gal-On petitioned the High Court of Justice on Sunday to prevent the AIG insurance company from selling an insurance policy that includes coverage for high-ranking corporate employees accused of sexual harassment.

According to the Knesset Member and Chair of the Meretz political party:

legitimizing such a policy reduces the danger associated with committing sexual harassment, neutralizes [the law's] preventative force, and neutralizes the law in terms of preventing sexual harassment.

The Christmas day filing was probably not the sort of gift AIG was hoping for, although given the year the company has had it may not seem like that big a deal.

Although I would be surprised if the motion was successful, for possible purchasers of such policies, if they are not going to be valid, much better to find out before paying the premiums than after the fact - as happened to the policyholder in a 5th Circuit decision earlier this year. See Check Your EPLI Policy - When Coverage For Discrimination Doesn't Mean The Most Common Type of Discrimination Claim.