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

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 Demberger is the content strategist at Risk & Insurance®. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]