Costco Gender Discrimination Suit To Be Covered By Excess Insurance, Says Court

Poor employment practices at Costco have left the retail giant’s insurer on the hook for an underlying discrimination case.

In 2004, Costco Wholesale Corporation faced a class action lawsuit alleging gender discrimination in its promotion decisions. It notified its insurer of a potential claim and promptly provided notice of the lawsuit when it was filed.

In 2013, Costco reached out to the other insurers on its employment practices liability tower, including Arrowood Indemnity Company, alerting them to the state of the underlying suit. The parties had moved to mediate the dispute, and Costco wanted to see if Arrowood planned to attend. But Arrowood did not respond.