Media headlines today are filled with claims of sexual harassment and discrimination. In the last 20 years, employee lawsuits have risen more than 400% with wrongful termination suits up more than 260%. Today’s employers are more likely to be sued by an employee than to experience a fire at their facility.
Most companies purchase property, general liability, auto, and workers compensation insurance to protect their assets from direct loss and third party claims and to comply with statutorily mandated coverage. Considering today’s business environment, an additional critical insurance protection to consider is Employment Practices Liability Insurance (EPL). This coverage protects an insured from claims made against the employer by employees, former employees, potential employees and any other third party claimants in areas such as:
- Discrimination (sex, age, race, gender, etc.)
- Wrongful termination
- Sexual harassment
- Breach of employment contract
- Failure to employ or promote
- Wrongful discipline
- Wrongful evaluation
- Wrongful infliction of emotional stress
The top trending EPL lawsuits today include wrongful termination, illegal background checks, and wage and hour lawsuits. Even an organization with good human resources policies and procedures in place can be sued and the cost of defending a claim can be large. It is not uncommon for legal fees to exceed $300,000. This affects both large and small companies with almost half of all claims involving private companies with less than 100 employees.
The most prudent way to protect your business is to explore purchasing an Employment Practices Liability Insurance policy. The cost of an EPL policy is a fraction of what it would cost should you wind up on the losing side of a lawsuit. EPL premiums vary depending on a number of factors, such as:
- Amount of coverage purchased
- Number of employees
- The company’s current anti-harassment and anti-discrimination policies
- Past EPL claims history of the employer
When this insurance coverage was first introduced in the early 1990’s, the insurance was normally limited to lawsuits or claims that originated from past, present or future employees. Today most insurance carriers will include third party liability coverage when asked. This is a very important addition to the policy that should be included. This endorsement will protect and defend the insured against EPL claims brought by anyone outside the employee scope such as a vendor or client.
An experienced business consulting team, like Univest Insurance, can assist in the review and selection of this important insurance. Univest Insurance represents and has strong relationships with the commercial insurance companies that specialize in Employment Practices Liability Insurance. We can identify which strategies are best for your company and create a roadmap to implement them successfully. To discuss how we can help you determine the best approach, please contact us at 800-220-3077 or email@example.com.
Insurance products offered through Univest Insurance, Inc. are obligations of the issuing insurance companies, not obligations or deposits of or guaranteed by any bank and are not insured by the FDIC or any other agency of the United States.