From hiring new workers to assigning duties, each of your decisions affects employees in a unique way. Although these actions are critical to running your business, they also create exposures that could lead to costly claims by employees or governmental regulators. Even if they are not warranted, claims for wrongful employment practices can disrupt operations, damage your business’s reputation, hurt employee morale and negatively impact your bottom line.
Thankfully, businesses can rely on employment practices liability (EPL) insurance to protect against a wide range of wrongful employment practices claims, including wrongful termination, discrimination, sexual harassment and retaliation.
CLAIMS SCENARIO
Take All Complaints to Heart or Get Taken to Court
THE COMPANY
A small health club with only a few employees: A local health club employs just 10 workers, most of whom are male. While the staff members seem to get along from the employer’s perspective, one of the female trainers expressed private concerns to her manager.
Specifically, the female employee felt uncomfortable with the way her male peers spoke to each other when they were around her. In addition, she felt that she was unfairly overlooked for a recent promotion due to her sex.
Because the employer felt this employee wasn’t being treated any differently, they didn’t take any corrective action or address any of her behavioural concerns. As a result, a sexual harassment lawsuit was quickly filed against the company.
EPL INSURANCE IN ACTION
Sexual harassment cases are becoming increasingly common and can affect businesses of all sizes. While organizations need to take reports of harassment seriously, EPL insurance can help organizations respond effectively to claims.
Furthermore, many policies provide additional resources companies can use to boost their risk management practices. Notably, EPL insurance can connect businesses to human resources consultation, which can be invaluable when avoiding legal action.
BENEFITS OF EPL INSURANCE
Coverage for alleged acts: EPL insurance not only protects organizations from actual wrongful acts, but alleged acts as well. Specifically, EPL coverage 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 that 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.
Risk management strategies: Organizations that take the time to implement basic risk controls are better equipped to avoid claims altogether. Many insurance companies provide access to risk management training and human resources consulting. These services can greatly reduce the likelihood that your company is sued by an employee.
