Employment Practices Liability Insurance

employment practices liability insurance

“Why Do I Need It?”

Employers of all sizes are exposed to legal actions filed by current or former employees alleging discrimination, harassment, wrongful termination, and other charges. Employment Practices Liability Insurance covers lawsuits brought by employees (past, present or prospects), or governmental entities against the insured employer alleging wrongful discharge, discrimination or certain types of harassment.   EPLI coverage is excluded under most General Liability policies but can be written on a stand-alone policy.

Claims can arise from employees being offended by cartoons, jokes, suggestive comments from supervisors and/or co-workers (sexual harassment), termination of or failure to promote an older employee (age discrimination), overbearing supervisors (hostile work environment), different rules for men and women in the same positions (sex discrimination), etc.  As you can imagine, the potential for Employment Practices Liability claims are almost endless – and usually very expensive.

I recently read about an EPL claim where the administrative assistant in an attorney’s office was terminated after 15 years of employment.  Her new supervisor was much younger and constantly criticizing the assistant’s work and attitude, despite having never received any prior negative reviews.  The administrative assistant was terminated following a negative annual review by her young supervisor.  She then filed a lawsuit against her employer for age discrimination and hostile work environment (harassment by the supervisor), won her lawsuit and was awarded a settlement of over $1 million plus court costs.

Many cases have involved female employees suing their employers for sex discrimination when a male co-worker (having the same or fewer credentials as the females) was promoted over them.  Some of these claims have involved large, well-known companies such as Wal-Mart and Publix.

We also see quite a few claims for sexual harassment.  The days of posting or passing around cartoons and jokes or commenting on a co-worker’s appearance and/or clothing and not getting into trouble are a thing of the past.  It’s often difficult to draw the line between innocent fun and malicious abuse.

With society’s sue-happy and politically correct mindset, these claims are becoming more and more frequent. I strongly urge every employer to sit down with their insurance agent and discuss this very valuable,but often overlooked,insurance protection.

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