Why Do Employers Need Employee Practices Liability Insurance?

We all hear the common stories in the news and from friends and other business owners of employees suing their employers for a variety of reasons, including harassment, discrimination, sexual harassment, wrongful termination, etc…

All too often, however, business owners don’t think that this could happen to them. They “know” that their employees are well trained and would never harass or discriminate against each other. They also “know” none of their employees would ever file a claim.

Unfortunately, these same business owners are often blindsided when they do get slapped with a lawsuit. All it takes is one mean-spirited joke in the warehouse, a little too much alcohol at the Christmas party, or a job candidate who feels wronged for not getting hired – and a company could be facing an expensive liability claim.

According to the U.S. Equal Employment Opportunity Commission, 99,947 discrimination suits were filed in the year 2011 against employers. This includes over 35,000 claims of race discrimination, over 28,000 claims of sex discrimination, over 23,000 claims of age discrimination and over 25,000 claims of disability discrimination (the number of individual claims adds up to more than the overall suits filed because discrimination suits often include multiple claims). The EEOC also documented over 11,000 sexual harassment suits filed in the U.S. in 2011.

These are big numbers folks, and they seem to rise every year. Just over the last ten years, the total amount of discrimination suits has risen almost 20% (80,840 suits filed in 2001 vs. 99,947 filed in 2011).

Every business is at risk. That’s why every business with employees should invest in employee practices liability insurance (also called employment practices liability insurance), which covers and protects companies from these types of lawsuits.

There are a variety of EPLI policies available, and most will cover the cost of defending against a liability claim and any settlement or claim payouts required, up to the limit of the policy.

A majority of EPLI policies cover the following types of claims:

  • Discrimination (race, sex, age, religion, disability, sexual orientation, etc…)
  • Harassment/sexual harassment
  • Wrongful termination
  • Invasion of privacy
  • Defamation
  • Emotional distress
  • Breach of contract

If you take anything away from this article, it should be that no company is immune. A liability lawsuit against your company could eat away your profits or even destroy your business. Make the smart move and call Fusco & Orsini Insurance Services to learn more about employee practices liability insurance (employer practices liability insurance). Contact us at (858) 384-1506 or through our website.

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