Employment Practices Liability should be part of every insurance portfolio. Statistics show an employer is more likely to have an EPL claim then a general liability or property loss. Companies can protect themselves against discrimination, sexual harassment, wrongful termination, and retaliation claims. Claims may be brought by either employees or by the third parties with whom the Company interacts during the course of business. Employers are held liable whether they had any knowledge a violation was committed. An EPL Policy can also provide smaller companies with much needed human resource and risk management support. Even if the claim is without merit, thousands of dollars in defense costs will be expended.
Employers of every size need EPL protection. Over 60% of the EPL claims filed annually are against small employers (1-50 employees). Any organization without a full time human resource person should not be without coverage. It is also vitally important for large employers to be protected, lest they be considered a "deep pocket." Aside from additional risk management training, an EPL policy is great protection against costly class action litigation.
Claim Example: A man was fired after a co-worker complained about inappropriate comments made during a conversation with fellow employees about a Seinfeld episode that aired evening prior. The Company cited a zero tolerance policy on sexual harassment as the grounds for dismissal. The man sued the Company saying he was wrongfully terminated and that the dismissal was a result of his age. The jury found in favor the plaintiff, and the man was awarded over $100,000 in lost salary. Punitive damages were also awarded for over ten times that amount!