As costs for litigation and damage awards climb, experts predict that employment liability will only become more complex. Thus, it is critical for business owners to understand their exposures and options for managing risks.
Protect Against Employment Liabilities
Employment practices liability (EPL) insurance is a policy used to cover your risks due to some of the most common employment-related lawsuits, including:
• Wrongful termination: The discharge of an employee for invalid reasons.
• Discrimination: The denial of equal treatment to employees who are members of a protected class.
• Sexual harassment: Subjecting an employee to unwelcome sexual advances, obscene or offensive remarks, or the failure to stop such behavior.
EPL works to provide the necessary resources to defend your company against a lawsuit or to pay for a claim. To best understand how to cover your EPL risks, it’s important to know the potential sources:
• Recruitment practices
• Employment applications
• Employment offers
• Employee orientation process
• Annual conduct reviews
• Enforcing performance policies
• Termination (or improper documentation of the items listed here)
Employment law is complex and varies depending on the jurisdiction.
Well-organized and credible employment documents can demonstrate fair treatment, deter litigation, ensure employee honestly, and, should litigation occur, demonstrate the employee’s actions.
Evidence of desirable employment practices and policies may be required for an EPL policy, and will certainly help defend against a suit (even for a small, home-based business with only a few employees). The underwriter may require a copy of the following policies to show that you are taking steps to reduce your risks:
• Sexual harassment
• Equal opportunity