1. We settled an EEOC complaint with a former employee. Are payments for attorney's fees, emotional distress and alleged lost back pay up to the insurance deductible amount considered non-operating expenses? The employment liability will reimburse us for amounts above the deductible.
2. We agreed to reimburse our client for loss incurred in their portfolio due to our error. This agreement was made to avoid a lawsuit and to maintain the relationship. We are subject to a $250,000 deductible. Our Errors and Omission insurance will cover the cost above the deductible. Is our deductible payment to cover the loss considered an operating expense? This is not the first time we had to reimburse clients for our error, but this time it is of significant amount.
Also, we agreed to pay interest from the time loss incurred - insurance will not cover this. Should this be non operating expense?
Total of the loss and interest will reported in one line - Settlement Cost.
2. We agreed to reimburse our client for loss incurred in their portfolio due to our error. This agreement was made to avoid a lawsuit and to maintain the relationship. We are subject to a $250,000 deductible. Our Errors and Omission insurance will cover the cost above the deductible. Is our deductible payment to cover the loss considered an operating expense? This is not the first time we had to reimburse clients for our error, but this time it is of significant amount.
Also, we agreed to pay interest from the time loss incurred - insurance will not cover this. Should this be non operating expense?
Total of the loss and interest will reported in one line - Settlement Cost.
