Employment practices claims are one of the most common liabilities faced by business owners. The The U.S. Equal Employment Opportunity Commission (EEOC) receives upwards of 500,000 per year, regarding employment-related discrimination, harassment and retaliation claims among others. Not only to these claims occur frequently, they’re more just an inconvenience for employers. The 2017 Hiscox Guide to Employee Lawsuits reports that the average total cost of claims that resulted in a defense and settlement payment was $160,000. With the average self-insured retention deductible being around $50,000, each case would cost an employer an extra $110,000 out of pocket to settle without any additional employer liability protection.
Employment practices liability insurance (EPLI) provides coverage to a business in the event an employee brings an employment-related claim against them. Here are 4 common lawsuits that EPLI can help protect against.
1. Employment Discrimination.
When an employee or job applicant is treated unfavorably because of race, skin color, nationality, sex, disability, religion or age, it falls under employment discrimination. Employment discrimination can occur in a variety of ways, including but not limited to: a job advertisement that suggest preferred types of candidates outside of professional attributes, pay disparities among equally-qualified employees in the same position, denying certain employees the use of company facilities, and more.
2. Sexual Harassment.
Workplace sexual harassment can be either verbal or physical, or both. Types of sexual harassment include jokes, innuendos, slurs, name-calling or insults, groping, touching or other unwanted physical contact. The harasser doesn’t necessarily have to be the employer; it could be another employee, a supervisor or even a contractor. EEOC standards of liability state that:
- An employer is responsible for the acts of its supervisors, and
- Employers should be encouraged to prevent harassment and employees should be encouraged to avoid or limit the harm from harassment.
3. Wrongful Termination.
When terminating an employee, employers must be very careful they are not violating one of a number of employee rights, even in at-will employment relationships. Examples of wrongful termination include:
- When an employee is terminated before the expiration of a written or verbal employment contract
- When an employee is terminated after reporting their employer to a government agency
- If an employee is fired without being given the proper amount of warnings or corrective actions.
4. Wrongful Discipline
Workplace disciplinary measures are designed to help employees improve their performance, and should not be used as punishment. An employer should always have sufficient reason for disciplinary action taken against an employee, such as misconduct or negligence. If the discipline is not fair, constructive and appropriate to the situation, it can be cause for a wrongful discipline case.
About Axis Insurance Services
At Axis Insurance Services, we aim to help our customers identify their exposures and protect themselves. Founded in 1999, we offer insurance programs to a wide variety of professionals and industries including attorneys, real estate, healthcare, architects, and more, and also have a wholesale division. We pride ourselves on offering flexible insurance coverage tailored specifically to each customer’s needs. To learn more about our solutions, contact us at (201) 847-9175 to speak with one of our professionals.
