The Law

Pay Disparity Case Not Covered by Insurer Due to Insufficient Notice

National Casualty Company will not be responsible for the more than $18 million settlement between Fulton County and its attorneys who claimed pay disparity.
By: | June 1, 2018 • 2 min read

Fulton County, Georgia, employed numerous attorneys between July 2013 and July 2015. Of those attorneys, 338 brought seven lawsuits and one grievance against the County, alleging unfair wages and pay disparity.


The County employed attorneys in the Public Defender’s Office, the Solicitor’s Office, the District Attorney’s Office, the Child Advocate’s Office and the Superior and State Courts. A number of attorneys claimed the County failed to pay each office “equal wages for equal work,” opening up a pay disparity dispute.

In their lawsuit, the employees alleged they sustained financial damage, because they did not receive the proper payment amounts required during their tenure. Additionally, they claimed the County breached its employment contracts by not paying salaries required by personnel regulations set up by the County in the first place.

These regulations set attorney and other employee pay rates. When all was said and done, the total cost to settle all cases was $18,362,100.

During the period in question, Fulton County held a liability policy with insurance carrier National Casualty Company. The policy was a retained limit liability insurance policy specifically for public entities, which provided “employment practice wrongful act” coverage limited to $7 million per occurrence.

When the County approached National for payment on the settlements, National declined, stating it had not received sufficient reports for the claims.

The County relied on its risk management team to communicate with National. While the team did send notice and updates during the settlement cases, it was sending those updates through the Willis Group, which acted as the County’s broker. The Willis Group sent the notices to Civic Risk Underwriting Managers, National’s underwriter.

Instead of sending the claims to National, Civic Risk reviewed the applications. When finally presented with the settlement amount, National claimed its policy would not cover the amount owed to the attorneys in the underlying case.

The County and National found themselves battling it out in court. In the Georgia Court of Appeals, the court granted in part and denied in part Fulton County’s motion, stating that the policy says it would provide coverage, yet the County did not provide proper notice.

Scorecard: National will not have to pay for Fulton County’s underlying suits, because the County didn’t provide sufficient notice to the insurer.

Takeaway: Direct contact between an insurer and their insureds is best practice when it comes to claims. Having third parties involved can muddle the message like a bad game of Whisper Down the Alley. &

Autumn Heisler is the digital producer and a staff writer at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Black Swans

Black Swans: Yes, It Can Happen Here

In this year's Black Swan coverage, we focus on two events: An Atlantic mega-tsunami which would wipe out the East Coast and a killer global pandemic.
By: | July 30, 2018 • 2 min read

One of the most difficult phrases to digest without becoming frustrated or judgmental is the oft-repeated, “I never thought that could happen here.”


Most painfully, we hear it time and time again in the aftermath of the mass school shootings that terrorize this country. Shocked parents and neighbors, viewing the carnage, voice that they can’t believe this happened in their neighborhood.

Not to be mean, but why couldn’t it happen in your neighborhood?

So it is with Black Swans, a phrase describing unforeseen events, made famous by the former trader and acerbic critic of academia Nassim Nicholas Taleb.

We at Risk & Insurance® define these events in insurance terms by saying that they are highly infrequent, yet could cause massive damages. This year, for our annual Black Swan issue, we present two very different scenarios, both of which would leave mass devastation in their wake.

A Mega-Tsunami Is Coming; Can the East Coast Even Prepare?, written by staff writer Autumn Heisler, profiles an Atlantic mega-tsunami, which would wipe out lives and commerce along the East Coast.

On the topic of whether the volcanic island of La Palma, the most northwestern of the Canary Islands, could erupt, split and trigger an Atlantic mega-tsunami, scientists are divided.

Researchers Steven Ward, a geophysicist at UC Santa Cruz, and Simon Day of University College London, say such a thing could happen. Other scientists say Day and Ward are dead wrong; it’s an impossibility.

One of the counter-arguments is backed up by the statement that there has never been an Atlantic mega-tsunami. It’s never happened before and thus, could never happen here. See exhibit “A” above, re: mass school shootings.

Viral Fear: How a Global Pandemic Kills an Economy, written by associate editor Katie Dwyer, depicts a killer global pandemic the likes of which hasn’t been seen in a century.

Tens of millions of people died during the Spanish Flu outbreak of 1918.

Why it could happen again includes the fact that it’s happened before. The science on influenzas, which are constantly mutating, also supports just how dangerous a threat they pose to millions of people beyond the reach of antibiotics.

Should a mutating avian flu, for example, spread widely, we could see a 10 percent drop in GDP, mostly from non-physical business interruption.

As always here, the purpose is to do exactly what insurance modelers and underwriters do; no matter how massive the event, we create scenarios, quantify possible losses and discuss risk mitigation strategies. &

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]