Small businesses need EPL or EPLI insurance to protect themselves from employment disputes where their rights might be unknowingly or knowingly violated.
Certain industries are more likely to face EPL claims, including Retail, Manufacturing, Healthcare, and Professional Services.
Retail is prone to lawsuits due to employee turnover.
This industry faces more lawsuits related to employment than others.
The healthcare industry invites expensive employment lawsuits.
Defending your business against allegations, even baseless ones, can be costly.
Lawsuits over employment practices are growing in the US. Workers can easily file claims for harassment, discrimination, and wage disputes. The government encourages litigation and all businesses should be ready.
Workplace conflicts are frequent, and employees have various avenues for pursuing legal action against their employers as per federal and state regulations.
Laws like Title VII, ADA, and ADEA create broad rules. States may have even stricter rules than federal laws.
The US government formed the EEOC to support people who believe they’ve experienced unfair treatment from their employers.
The insurance company defends and pays for claims against management. Defense fees can add up fast, even if the accusation is unfounded. Different levels of protection are available, but a personalized approach is best.
If an employee is fired for violating their contract or employment laws, it’s called wrongful termination.
Discrimination against employees due to their gender, ethnicity, age, or disability, resulting in unfavorable treatment such as promotional delays.
Sexual harassment at work.
Spreading lies to hurt an employee’s reputation is called defamation.
An employee feels their privacy is violated if their employer searches or surveils private areas such as dressing rooms or bathrooms.
Here are some claim examples that illustrate what Employment Practices Liability Insurance covers:
A 62-year-old sales rep for YounGuns sued for age discrimination after he was fired for not meeting sales goals. He was let go despite no proof of poor performance or company downsizing. The case was settled for $100,000 plus $15,000 for defense expenses. Initially, he sought $500,000.
The retail store faced a lawsuit from a group of Indian applicants who were all denied employment solely because of their race and ethnicity. The legal defense and settlement cost totaled more than $200,000.
Female employees at CodingAndStuff accused the CEO of sexual harassment. The President investigated, but was fired by the CEO citing performance issues. The President filed a wrongful termination suit due to conflict with the Board. The settlement and legal fees exceeded $1 million.
The CFO’s Assistant was fired for sharing confidential news about layoffs with colleagues. She later sued for sexual harassment and retaliation, alleging that the CFO regularly made inappropriate comments and touched her inappropriately. The company spent more than $150,000 defending the CFO.
EPL insurance cost depends on company size, development stage, and other factors.
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