A few years ago, my client decided his company was exposed too much risk and decided to do something about it. At a time when employment-related claims are on the rise nationally, he decided to protect his company with Employment Practices Liability Insurance (EPL). Every day, my client and his company’s leadership make decisions on a range of issues, including things like hiring, firing, compensation, promotions and the work environment. Every one of these decisions impacts his employs and, depending on the outcome, could result in a claim related to wrongful employment practices.
Protecting against Employment-Related Lawsuits
Even unfounded allegations can come with a price. A company can do everything right to follow best policies and practices, but that doesn’t stop employees from filing lawsuits. The cost of defending law and settling employment law cases is high. These claims can disrupt morale, damage your reputation and lead to serious financial damages. The good news is you can protect your company against risks due to the most common employment-related lawsuits, including:
Wrongful termination: the discharge of an employee for invalid reason, such as breach of employment contract or violating civil rights of state or federal employment law.
- Discrimination: The denial of equal treatment to employees who are members of a protected class.
- Sexual harassment: Subjecting an employee to unwelcome sexual advances, obscene or offensive remarks, or the failure to stop such behavior.
EPL Insurance, Risks, and Protection
EPL works to provide the necessary resources to defend your company against a lawsuit or to pay for a claim. To best understand how to cover your EPL risks, it’s important to know the potential sources:
- Recruitment practices
- Employment applications
- Employment offers
- Employee orientation process
- Annual conduct reviews
- Enforcing performance policies
- Improper documentation of the items listed above
My client understood that even with good employment practices in place, the company could be at risk. EPL insurance provides the following protection to policyholders:
- Coverage for alleged acts. EPL insurance not only protects organizations from actual wrongful acts, but also alleged acts. It can safeguard an organization from claims related to discrimination, harassment, retaliation and wrongful termination.
- Timely responses to lawsuits. Employees suing their employers is common and organizations will want to be prepared. This is especially important when you consider there is no cap on how much a jury can award and that settlements in employment-related cases can easily reach six figures.
- Access to legal help. Strong EPL policies provide the insured with access to legal resources. This can prove invaluable if you need advice quickly.
Learn More about EPL Insurance
Want to learn more about EPL insurance? Claims for wrongful employment practices are on the rise. They often lead to business interruptions and costly claims. In order to truly protect your organization, its critical to seek EPL insurance. Contact a Healy Group Commercial Insurance & Risk Management advisor today.
About the Author:
John Kersey joined Healy Group in 2003 and has 30 years of experience designing risk management programs for commercial clients. As a risk management advisor, John strives to build strong relationships with his clients and business partners to understand their needs better and provide the best risk management strategies for their unique situations.