EPL Employment Practices Liability Insurance
Claims related to the management of employees are at an all time high and yet most employers remain uninsured. Here are 8 important reasons to reconsider if you do not have the coverage:
1. High Frequency of Litigation- 3 out of 5 employers are sued by former employees every year. The Equal Employment Opportunity Commission (EEOC) recorded 84,254 charges in 2017 and obtained more than $398 million in settlements for claimants.
2. Awards - The average award to plaintiffs is $325,000. This is the most immediate risk to financial loss for most businesses.
3. Target Business
a. Small Business: Over 40% of EPL claims are against firms with fewer than 100 employees.
b. All Business: Many Federal and State employment laws apply to all employers. Every employer has exposure regardless of size.
4. Bankruptcy: The financial ramifications of not having EPL insurance can be crippling, especially for small firms because they do not have the operating budgets to handle the defense costs, let alone settlements or judgments, of an uninsured claim.
5. Alleged Acts: EPL covers not only actual but also alleged acts of discrimination, harassment, retaliation, wrongful termination and other similar acts.
6. No Other Coverage: There is no EPL coverage under other insurance policies such as General Liability. Any endorsement to another policy generally provides insufficient limits, does not provide the breadth of coverage of a true EPL policy and erodes the limit available quickly.
7. Meal Breaks: Wage and hour litigation has quadrupled. More wage and hour collective/class actions have been filed in recent years than any other types of employment class actions combined. (Some policies don’t offer this defense coverage in CA.)
8. Discrimination: Gender discrimination, age discrimination and retaliation claims are on the rise. There are more women and “baby boomers” in the workplace than ever before. Recent Supreme Court decisions have lowered the standard of what constitutes retaliatory treatment.