Backstory
Sierra owns and operates a marketing firm in the Western U.S. and implemented an 831(b) Plan administered by SRA. Sierra designed her plan to filter business needs and to address the risks she was most concerned with including dispute resolution. Sierra contributed to her 831(b) Plan for several years without incident and was able to accumulate her annual contributions inside of a managed investment account and make dividend distributions from the plan reserves. In 2019, Sierra’s business was served with a wrongful termination lawsuit.
- INDUSTRY- Marketing
- ANNUAL GROSS REVENUE- $12 Million Dollars
DISPUTE RESOLUTION RISK
In today’s litigious society, the chances that businesses and business owners will need to defend themselves can seem inevitable. Sierra’s business employs over fifty employees and conducts transactions with many different vendors & customers that it contracts with.
Incident
Sierra terminated an employee in the spring of 2019. Later that year, her business was served a lawsuit by the terminated employee. In the suit, the employee had claimed age discrimination.
Resolution
Sierra filed a dispute resolution claim to the direct writer of her 831(b) Plan. The direct writer began its claims adjusting process to first determine coverage. Upon review, the direct writer determined that its dispute resolution policy provided coverage for litigation brought against the company. Once coverage was determined, the direct writer requested additional documentation from Sierra to understand the extent of the loss.
The lawsuit was settled between the employer and terminated employee through mediation. After receiving details of the lawsuit and corresponding settlement, the direct writer determined Sierra’s loss and made a claim payment to her business. Sierra was able to use the claim payment to pay her legal expenses and the settlement amount to the past employee.
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