Twenty-five years ago the Equal Employment Opportunity Commission (EEOC) reported a total of only 1,787 employment practices complaints. By 1998, the number had climbed to over 115,000.
Today, employment-related lawsuits are still on the rise due to new federal and state legislation, expanding judicial interpretations and widespread media coverage. Companies of all sizes are vulnerable. Sexual harassment, wrongful termination and discrimination lawsuits can wreak havoc on a business’ bottom line. Worse, even frivolous, unsubstantiated claims must be defended, often at considerable expense. And lawyers are searching for pockets, any pockets, for compensation.
It won’t happen to me.
Our employees would never sue us.
It’s a simple axiom: If you have employees, you need Employment Practices Liability Insurance (EPLI). You may not want to believe it, but it’s true. As an employer, have you ever:
• Hired an employee?
• Fired an employee?
• Had an employee who quit?
• Promoted or demoted an employee?
• Placed an advertisement for employment in the newspaper?
If you answered yes to any of the above questions, you have EPLI exposure.
Every day employers across the country are faced with this reality: you can do everything right, and still be sued. Even seemingly innocuous behavior can lead to litigation. No company is immune.
And, with expanding interpretations of existing laws, (like the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990 and the Civil Rights Act of 1991) and the pervasive media coverage of damage awards motivating employees with a grievance, no business is without risk.
In today’s increasingly litigious environment, EPLI coverage is a necessity for businesses of all sizes. EPLI coverage will help close a critical gap in your business insurance portfolio.
Employment Practices Liability Insurance (EPLI)
Even a business like yours is subject to lawsuits and claims resulting from alleged wrongful employment practices. EPLI coverage is designed to help protect against the devastating financial impact of wrongful employment practices claims. It’s a smart way to protect your business.
The coverage
Coverage is broader and more affordable than ever. The policy features a broad definition of covered “Wrongful Acts”, including – but not limited to:
• Violations of sexual harassment or other workplace harassment laws
• Violations of employment discrimination laws, whether federal, state or local
• Wrongful termination, dismissal, discharge, demotion or discipline
• Breach of employment contracts, whether written or oral
• Wrongful failure to hire or promote, including failure to grant tenure
• Unlawful retaliation against a past, present or future employee
• Violations of the Family and Medical Leave Act Additional highlights
• Prior Acts coverage (no retroactive date)
• Broad definition of “Insured”
• “Duty to defend” all covered claims including EEOC, state administrative, arbitration and mediation proceedings
• Coverage for Damages and Claim Expenses including:
• Monetary judgments, settlements and awards
• Back pay, front pay and other compensatory damages
• Pre-judgment and post-judgment interest
• Attorneys’ fees, both those incurred by the insured and those the insured is ordered to pay for the prevailing claimant
• Costs of investigation, adjustment and appeal of claims
• Coverage is provided for Wrongful Acts committed anywhere in the world provided that legal action is pursued within the United States
Risk Management Techniques
Along with the proper insurance coverage, there are steps you can take as an employer to help manage your exposure to employment related grievances.
• Establish appropriate written employment guidelines customized for your company and distribute them to all employees. Not only will the guidelines help you formalize your practices, they can also provide you with a better legal foundation in the event a complaint is filed.
• Know your legal responsibilities as an employer. Some requirements vary by size of business, but some apply more universally. The EEOC’s website (www.eeoc.gov) can be a valuable resource in understanding the requirements your business faces.
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