From the moment that your business starts the pre-hiring process until the exit interview, your business is vulnerable to an employment-related lawsuit. As a result, your business should take a hard look at whether it can afford to defend itself against alleged wrongful employment practices accusations. If not, there is an insurance solution called employment practices liability that protects against instances such as wrongful termination and sexual harassment suits from your current, prospective or former employees. This coverage applies to directors, officers and employees, and can sometimes extend to third party liabilities.
Why Choose Employment Practices Liability Insurance?
According to industry researchers, three out of five employers will be sued by a prospective, current or former employee while they are in business (Zywave). While some suits are groundless and no damages are awarded, the cost to defend the claim can be damaging on its own.
Employment practices liability policies provide protection from the following wrongful employment practices:
· Actual or alleged wrongful dismissal, discharge or termination
· Employment-related misrepresentation
· Employment-related libel, slander, humiliation, defamation or invasion of privacy
· Wrongful failure to employ or promote
· Wrongful deprivation of a career opportunity, wrongful demotion or negligent evaluation
· Wrongful discipline
· Vicarious liability for intentional acts
· Punitive damages
· Coercion or humiliation in relation to race, marital status, gender, age, physical and/or mental impairments, pregnancy, sexual orientation, and any other protected class established by federal, state and local statutes
Many policies offer the following inclusions and add-ons:
· Consultation, HR assistance and other risk management consultative services.
· Coverage for defense costs outside the policy limits
· Third-party liability coverage (ex. Employee harrassing a client)
· Wage and hour coverage for claims alleging wage and hour violations
·Volunteer workers can be added as additional insureds
· Extended reporting periods may be added.
To learn more about employment practices liability coverage and how Clarke & Sampson, Inc. can help protect your business, contact us today at (703) 683-6601.