Every employer, no matter how small, faces the specter of being sued by a past, present or prospective employee at some time.
In fact, such employment practices claims are widespread – so much so that most businesses are much more likely to have an employment practices liability claim than a general liability or property loss claim.
Nearly three-quarters of all litigation against corporations today involves employment disputes, which can be extremely costly. The cost associated with an employment practices claim can be significant.
In 2022, the Equal Employment Opportunity Commission 73,485 new discrimination charges, which represents an increase of almost 20% when compared to the previous fiscal year. In addition, the EEOC collected more than $513 million in monetary penalties for victims of discrimination and sexual harassment.
The large jump in sexual harassment claims and recoveries is a direct result of a surge in lawsuits since the start of the MeToo# movement, which has emboldened many victims to come forward and file complaints.
Keep in mind, the above are just penalties and do not include defense costs, which can exceed $100,000 per claim for employers.
For these reasons and more, employment practices liability insurance is crucial for any employer. The risks of being sued by an employee for discrimination or harassment have increased substantially, particularly now in the MeToo# era.
Employers need EPLI coverage because comprehensive general liability policies and workers’ comp policies exclude employment-related claims.
EPLI coverage
Policies cover:
- Defense costs (court fees, attorney fees and related costs).
- Payment of settlements and/or judgments up to the policy’s limits.
- Any fines or penalties levied by government agencies.
EPLI policies cover business owners as well as directors, officers and managers. Some policies also cover employees. Additionally, you can buy third-party policies to cover claims brought by non-employees, such as clients.
Types of action covered include:
- Discrimination based on gender, race, national origin, religion, disability or sexual orientation
- Sexual harassment or other unlawful harassment in the workplace
- Wrongful termination
- Failure to employ or promote
- Retaliation
- Employment-related misrepresentation
- Failure to adopt adequate workplace or employment policies and procedures
- Employment-related defamation or invasion of privacy
- Negligent evaluation of an employee
- Wrongful discipline of an employee
- Employment-related infliction of emotional distress.
NOTE: Wage and hour claims, or disputes regarding overtime pay for non-exempt employees, have become more expensive in recent years, so most EPLI policies exclude this coverage. Business owners may be able to find endorsements to add wage and hour coverage.
Costs
EPLI claims can be extremely expensive. The average cost of a discrimination claim is $125,000, and 25% of judgments exceed $500,000.
Most businesses are wise to have at least $1 million in coverage. However, higher coverage limits increase your premium cost, so you want to balance your coverage needs and your budgetary concerns.
Call us if you want further information or need help in gauging your EPLI coverage needs.
If you would like to speak with us call Gary Wallach at 914-806-5853 or click here to email or click here to visit our website.
BGES Group, located in Larchmont, N.Y. are New York Construction Insurance Specialists that represent 50+ companies and all the BEST general & umbrella liability programs! We offer every coverage you need including property, builders risk, inland marine, general liability, umbrella liability, auto, bid & performance bonds, workers’ compensation, N.Y.S. disability and group health. We are extremely responsive, responsible, trustworthy, fast, minimize your insurance headaches, we don’t charge ridiculous policy or service fees and when you call, text or email, whatever time of day, even weekends, we are ARE THERE to help YOU!
BGES Group are Workers’ Compensation Insurance Specialists for Tri-State Business Owners: Unhappy with your rates, company, being cancelled, losses causing difficulty getting coverage, in the middle of an audit dispute, payrolls misclassified, whatever your issue, we can help! We have special programs for: Auto Service, Contractors (especially New York), Limousine Services, Logistic Companies, Manufacturers, Recyclers, Truckers, we can help ANY tri-state business owner. We are considered “Preferred Agents” for this one program that if we can get you in, their pricing is excellent, offers long-term coverage stability and can cover multi-state operations. Program takes the hassle out of doing annual audits too.
If you would like to speak with us call Gary Wallach at 914-806-5853 or click here to email or click here to visit our website.
Company: BGES Group, 216A Larchmont Acres West, Larchmont, NY 10538
e-mail: bgesgroup@gmail.com
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