EMPLOYMENT PRACTICES
DOES YOUR BUSINESS NEED
EMPLOYMENT PRACTICES
LIABILITY INSURANCE?
I
n 2016, the Equal Employment
Opportunity Commission (EEOC)
received 97,443 charges of workplace
discrimination in private, federal, state,
and local government workplaces. The
EEOC responded to over 585,000 calls
to their toll-free number and more than
160,000 inquiries in field offices.
Since the financial crisis of 2007–2008,
employee liability claims filed against
employers have skyrocketed to nearly
100,000 annually, which is up 30 percent
from the lows of the mid-2000s. If an
employee files a claim against you and you
are taken to court, or if you settle outside
of court and you don’t carry Employment
Practices Liability Insurance (EPLI), the
cost could put you out of business.
General liability insurance does not include
EPLI, so talk to your insurance agent about
what coverage you do have and consider
the risk involved of not carrying EPLI
coverage. Wrongful termination lawsuits
have risen 260 percent in the past 20 years,
and 75 percent of EEOC claims are made
against small businesses with 50 or fewer
employees.
Employment practices liability insurance
protects a business from lawsuits that are
related to the Landmark Acts of Regulation.
It covers employment discrimination,
harassment, defamation, and retaliation.
It provides protection against claims for
the failure to hire, failure to promote, and
wrongful termination. EPLI may also
cover leased, seasonal, and independent
contractors.
THE LANDMARK ACTS OF REGULATION
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Title VII of the Civil Rights Act of 1964
Age Discrimination in Employment
Act of 1967 (ADEA)
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Americans with Disabilities Act of
1990 (ADA)
Family and Medical Leave Act of 1993
(FMLA)
Genetic Information
Nondiscrimination Act of 2008
(GINA)
Claims That Do Not Fall Under EPLI
Worker Adjustment and Retraining
Notification Act (WARN)
Fair Labor Standards Act (FLSA)
Claims that fall under the National
Labor Relations Act (NLRA)
• Employee Retirement Income Security
Act (ERISA)
• Occupational Safety and Health
Administration (OSHA)
• Matters related to the continuation of
benefits under COBRA
has just filed an internal complaint against
the employer or a supervisor
5) Improper response to an EEOC charge –
always respond promptly and courteously
6) Failure to follow your own policies –
make sure your HR and legal teams are
providing the proper protection and
training for management
Don’t ever assume an employee is aware
of and understands senior management’s
policies. When an employee acts surprised
and outraged at being terminated, it is
because management did not clearly
communicate with the employee.
Employment attorneys are in general
agreement that employees don’t always
sue because the employer violated a law.
Rather, they often sue because they were
humiliated in the termination process and
were not treated with respect and dignity. +
HOW TO PREVENT POSSIBLE EPLI
CLAIMS
No employee should be the victim of
discrimination and ridicule. The executive
leadership of any company or organization
is responsible for fostering a culture of
tolerance in their workplace. Conducting
sensitivity training classes and responding
promptly and courteously to all employee
complaints is essential for the good health
and future of your business.
Consider the top six reasons employees sue
their employer:
1) Not giving a clear reason for firing an
employee (this includes at-will employees)
2) Firing an employee for bad performance
when they have had good performance
reviews. A poor-performance paper trail
needs to be presented in court.
3) Poor timing – firing an employee who
BY: CHASE HELWIG, CLCS
ASSISTANT VICE PRESIDENT
JGS INSURANCE
Having spent seven years working
in the home improvement field, it
was only natural for Chase Helwig
to focus his insurance expertise on
the construction industry. Firsthand
knowledge of workplace occurrences
and operations allow Chase to provide
in depth analysis to identify exposures,
while providing unique comprehensive
solutions suitable for each individual’s
needs.
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