Risk & Business Magazine Knight Archer Insurance Magazine Fall 2017 | Page 27

EMPLOYEMENT LIABILITY
Employment Practices Liability Insurance:
Crucial For Small Business
A
ccording to a recent study, more than half of all
claims filed for employment-related liabilities are
against employers with fewer than 50 employees.
Alarmingly, the study also reveals that not even
two percent of small businesses have Employment
Practices Liability (EPL) coverage.
Examples of allegations that insurance coverage will defend and
pay for allegations of:
• Discrimination (sex, age, race, age, disability, etc.)
• Failure to train, advance, promote
• Sexual Harassment
• Humiliation
• More intimate working environments may cause personal problems
during layoffs
AN AFFORDABLE SOLUTION
Fortunately, with employment-based lawsuits on the rise and the
economy’s sluggish upward climb, EPL coverage is becoming more
affordable. More insurers are beginning to offer EPL insurance policies
with comprehensive coverage to smaller businesses to protect them in
tough times. In fact, EPL insurance is becoming so important to the success
of small businesses that it is being offered at more affordable prices and
being tailored specifically for those smaller companies. With the average
cost of an employment lawsuit being thousands of dollars, the potential
return dwarfs the initial cost of EPL coverage. Talk to Knight Archer
Insurance Ltd. to learn if this risk transfer option is right for your business.+
• Wrongful Termination
• Retaliation
• Some Insurers will offer coverage for allegations by third
parties where your employees are in frequent contact with the
public
HIGH PRICE TAG FOR DEFENCE, EVEN IF ALLEGATIONS
PROVE TO BE FRIVOLOUS.
Employment-related claims can be extremely costly, especially in
cases that drag on for years.
WITH A SLOW ECONOMY AND INCREASING
ADOPTION OF WORKER-FRIENDLY LAWS,
THESE CASES ARE ON THE RISE – IN FACT,
DISCRIMINATION CLAIMS ARE REACHING THEIR
PEAK, WITH THOUSANDS OF CLAIMS FILED IN 2010.
These claims are often based on racial discrimination, gender,
age and disabilities. Many small businesses cannot afford to pay
these costs and keep their company afloat.
WHAT PUTS SMALL BUSINESSES AT RISK?
Understandably, it can be much more difficult for small
businesses to defend themselves against employment-related
claims because they tend to have fewer resources and a different
work environment. Small businesses are particularly at risk for
employment-related claims for the following reasons:
• Many have a minimal staff and lack of in-house counsel and/
or human resources to rely on
• Overall lack of extensive recordkeeping on employee
performance
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