INSURANCE – Q&A WITH AN EXPERT
When your most valuable assets make damaging allegations, are you protected?
As a business owner, you consider your employees as one of your greatest assets. The daily actions by you or your managers influence your employees, things like hiring and firing, deciding who gets the promotion or scheduling shifts. All these actions can be the basis of an ugly lawsuit that can be an emotional and financial drain on any organization, with the average cost to defend and settle such a lawsuit hitting $160,000. According to Hiscox’s Guide to Employee Lawsuits, one in five businesses are drawn into a lawsuit by a current or former employee. The driving forces behind these claims can range from but are not limited to economic trends, poor HR guidelines or more recently, the #MeToo movement.
Defining EPL Insurance and What it Covers
Employment Practices Liability insurance is designed to provide coverage for wrongful acts arising from the employment process. It also covers the cost associated with a lawsuit brought forth by an employee, including the cost to hire an attorney, administrative court fees, the cost to conduct investigations as it pertains to defending your case, as well as the settlement and any judgement award-ed against you. The most frequent types of claims covered under this policy would include wrongful termination, discrimination, sexual harassment, retaliation and other types of inappropriate workplace conduct.
In addition to the above, Wage & Hour and Third-Party Coverage can be included in this policy. As the name suggests, Wage & Hour coverage deals with fair wages paid to employees. In the last five years, a total of $1.3 billion in back wages has been recovered by the Wage & Hour division of the U.S. Department of Labor. Third-party coverage extends coverage to apply to claims brought on by a non-employee of the company. This could include a vendor, a client or a member of the public.
When purchasing an EPL policy, it is also important to focus on and be aware of the continuity date, the named insureds on the policies and a shrinking limit provision.
Don’t let an EPL matter derail you. Whether you are guilty of an actual wrong act, or it is a false allegation stemming from retaliation, you stand to spend thousands of dollars to defend your case and possibly settle just to make it go away.
At Harmon Dennis Bradshaw, we are here to help you navigate through the many facets of this coverage and secure an insurance policy that will protect you appropriately according to the risks you face before it is too late.
Meet the Expert
Jeremy Crider, Risk Advisor Harmon Dennis Bradshaw
Jeremy Crider is a Commercial Property and Casualty Risk Advisor at Harmon Dennis Bradshaw, Inc.
334-517-1825 / jcrider@hdbinsurance.com
