We live in a litigious society. As business owners and business managers you are now, more than ever, at risk for legal suits. Employee lawsuits can be so much more than just an annoyance. They can take away from productivity, team morale, can distract your management team from functioning optimally…..and can cost you a lot of money. Did you know that over the past 20 years, employee discrimination law suits have risen by approximately 400%? Moreover, close to 50% of these suits are not against large businesses, but are rather targeted at small businesses with 100 or fewer employees. Did you know that the average timeline to resolve an employee discrimination claim is a year and a half to two years? Overall, the average cost of one Employment Liability claim to your business for court and legal fees at trail ranges from $150,000 to $200,000.
From perceived discrimination to legitimate concerns, the risk of your business facing a law suit is an ever-growing threat. Most business owners would admit that carrying insurance on their business is a necessity. However, very few business owners take active steps to mitigate the risk to their business by discussing options with their insurance agent.
Employment Practices Liability Insurance (EPLI) protects businesses and owners from this intangible threat. EPLI claims can span from claims of emotional distress from your employees to a wrongful failure to employ/promote, to assault and battery at the workplace. EPLI coverage helps protect your from claims of discrimination based on: wage and hour claims, gender pay differences, discrimination due to race, color, religion, sexual orientation, disability or age.
There are some re-occurring trends among business owners when it comes to EPLI coverage.
Check out these: “Top Two Excuses to Not Carry EPLI (and why it puts you at risk)”:
1-) “My Employees Would Never Sue Me”: Most small business owners mistakenly think that with a small staff they will have little to no exposure. Many business owners say that, “my employees are like family. They would never sue me”. Unfortunately, several of these business owners have since faced law suits from their employees…..and it cost them a lot of money. Embrace a close team…but make sound business decisions.
2-) “This Is Covered on My General Liability Policy”: Sorry, that’s incorrect. Employment Practices Liability Insurance is not covered by any other policy. Unless you have an EPLI policy in place, you and your business are at risk for this exposure.
So what are some of the most common claims and how might these play a role in your business?
These are the Top Three Employment Claims That Are Filed Against Business Owners:
1-) Wrongful Termination: All businesses should have an employee handbook. Employment liability exposure is yet another reason that your business needs to have an employee handbook that is signed by all employees. The handbook needs to outline company policies, conduct expectations, time-off procedures, and needs to include documented, progressive discipline procedures. If there is no structure to your employee practices that are standardized across the board, it becomes your word against the employee’s. And that’s never a good place to be. While it may seem “nice” to make exceptions for specific employees, diverging from the handbook creates exceptions that can cause issues down the road. Standardizing your procedures and having them accessible to all employees from the beginning of employment helps decrease miscommunication. Many wrongful termination suits brought against companies pertain to topics that should be covered in an employee manual. If the employee was required to read and sign the manual and termination was in line with procedures set forth in the manual…it takes a lot of credibility out of an employee’s complaint of wrongful termination.
2-) Discrimination: This is yet another reason why all practices should be outlined in your employee manual and all practices should be standardized for all employees. Discrimination can be associated with age, religion, sex, disability or any other number of things. While discrimination is often something that is based on the perception of each individual, one way that business owners can protect themselves from this accusation is to have established standards and practices and maintain them equally for all employees.
3-) Harassment: Whether this takes the form of sexual harassment, verbal harassment, or physical harassment, again, having established guidelines that are standardized across all employees helps mitigate the exposure for business owners.
So how can you protect yourself and your business? Great question! The CHOICE Insurance Agency is a brokerage that is able to help with all of your personal and business insurance needs. We can create a complete, comprehensive review of your business coverages, make recommendations on any gaps that we find in your existing policies, and “shop” with our brokerage markets to get you excellent rates and tailored coverage. Many business owners end up with policies spread over multiple agencies because they wanted to “shop” rates. This leaves your business coverages open to gaps that that leave you exposed. By moving all your policies to one brokerage, we can look through multiple companies for optimal rates, but we can help maintain a complete view of your policies to cover gaps….like not having EPLI protection.
You work too hard to grow your business to not protect it correctly. To get the tailored policy coverage that you need for your business, call The CHOICE Insurance Team today at 757-416-5100 and ask for a free, comprehensive review. Give us a call today!
All the Best,
The CHOICE Team
In 2008 Choice Insurance Agency was created out of the former Realty Consultants Insurance Agency founded in 1980 by George Ayers Capt. USN Ret. Since 2008 the Choice Insurance Agency has more than tripled in size and is continue on a track of rapid growth. The Choice Insurance Agency focuses on four areas of expertise: Private Client Group, Coastal Coverage, Senior Programs and Commercial/Business Insurance. Our business model has allowed us to expand into all of the states on the Eastern Seaboard from New York to Florida including Pennsylvania and DC to better serve our ever-growing client base. As an Insurance brokerage stationed in Hampton Roads with access to well over 40+ insurance carriers, the Choice Insurance Agency is able to shop for the best rates, cover those picky coastal zones and create a tailored plan to fit your insurance needs. The Choice Insurance Agency. Call us today and see why we are the top “CHOICE” in Hampton Roads.