FREQUENTLY ASKED QUESTIONS (FAQs)

Transcription

1 EMPLOYMENT PRACTICES LIABILITY fr small businesses FREQUENTLY ASKED QUESTIONS (FAQs) What is Emplyment Practices Liability Insurance? Emplyment Practices Liability (EPL) insurance prtects an emplyer frm emplyees claims alleging discriminatin, wrngful terminatin r harassment, including sexual harassment. EPL insurance pays fr liability damages and defense csts due t these charges brught by full-time, part-time, temprary and seasnal emplyees. Why d small businesses need EPL cverage? Abut 50 percent f EPL charges are filed against small businesses. Emplyment laws that emplyees may use as a basis fr actin against their emplyer apply t the majrity f businesses, including small firms. Even grundless emplyment charges may require legal defense and defense csts can by significant ften $10,000 r mre. Insureds need EPL cverage t have thse defense csts cvered and t get access t attrneys experienced in defending emplyers frm emplyment-related charges. Small businesses ften dn t have human resurces prfessinals t develp the frmal persnnel plicies and prcedures that can help prevent emplymentrelated charges. And they dn t have deep pckets s just the cst t defend them frm EPL claims r charges can hurt a small business. Why wuld a reputable, well-run business need EPL insurance? N matter hw well they run their business, an emplyee can allege anything at anytime. Emplyers need t defend themselves frm emplyment-related charges, even if the charges are withut merit.

2 EPL cverage pays fr defense csts even when the charges are grundless. Defense csts can be significant, well beynd what many small businesses can affrd t pay. What s changed that nw makes EPL insurance imprtant fr small businesses? Tday s business and legal climate is different than it was years ag. Emplyees are mre aware f emplyment laws, their rights and hw t exercise their rights by taking actin against emplyers. Federal and state emplyment-related laws and regulatins have been bradened. Emplyees see a lt f news cverage and publicity abut emplyment cases and awards against emplyers. The wrkfrce is mre diverse with wmen, lder wrkers and minrities representing a significant percentage f emplyees. What advantages des ur EPL insurance have t thers in the market? Our EPL cverage was designed fr the needs f small businesses. It s affrdable and csts nly a small fractin f EPL insurance premiums when sld as a separate plicy. It s easy t handle; there s n need t cmplete a separate EPL applicatin. EPL cverage is cnveniently endrsed nt the package plicy; there s n additinal plicy t handle. Cverage is n a par with many f the EPL cverages ffered t large businesses. Claim service is prvided by EPL claim specialists. Insureds needing legal defense are represented by experienced emplyment law firms whse services wuld nrmally be cst prhibitive fr a small business wner. The prgram includes a lss preventin website where yur agency and insureds can access infrmatin and tls t help minimize expsure t emplyment claims.

3 What lss preventin services des ur EPL prgram include? Our prgram includes an EPL lss preventin website that prvides emplyers with tls and infrmatin t help them avid situatins that can lead t an emplyment claim. When facing an EPL charge, it is critical fr an emplyer s defense t present evidence f effrts t prevent r crrect unlawful emplyment practices. The tls in ur EPL lss preventin website can help them dcument thse steps. It prvides insured emplyers access t imprtant infrmatin such as: EPL risks and lss examples Applicable emplyment laws Mdel emplyment plicies and prcedures Library f recent develpments in emplyment law Library f EPL frequently asked questins (FAQs) Hw much des Emplyment Practices Liability insurance cst? Fr $100,000 in EPL limits with a $5,000 deductible ur EPL cverage wuld cst $47.73 per full-time equivalent. Our prgram csts a small fractin f what separate EPL insurance plicies cst which are ften $2,000 r mre. What des an Emplyment Practices Liability claim typically cst an emplyer? 81% f EPL claims are reslved fr between $22,400 and $40,500. This includes defense csts and liability damage payments. This isn t an expsure that a small business shuld self-insure; given the risk, ur EPL prgram is a tremendus value. What laws and statutes create the necessity fr EPL? The need fr Emplyment Practices Liability insurance arises frm a number f federal and state laws under which emplyees may bring actins against their emplyers fr such matters as sexual harassment, discriminatin and wrngful terminatin. Title VII A federal law enacted in 1964 and amended by the Civil Rights Act f Title VII prhibits discriminatin r harassment n the basis f race, clr, religin, gender, r natinal rigin. Title VII als created the Equal Emplyment Opprtunity Cmmissin (EEOC) as a venue fr emplyment-related grievances.

4 The Equal Pay Act f 1963 Prhibits unequal pay fr men and wmen serving in substantially the same psitin. The Age Discriminatin in Emplyment Act f 1967 Prhibits discriminatin against persns wh are 40 years f age r lder. The Americans with Disabilities Act f 1990 Prhibits discriminatin against peple with physical r mental disabilities. Emplyers als must make any reasnable accmmdatins fr their disabled emplyees t cnduct their duties as lng as such an accmmdatin des nt pse an undue hardship n the emplyer. The Family and Medical Leave Act f 1993 prvides that an emplyee can take up t 12 weeks f unpaid leave t care fr a new child r a seriusly ill family member, including themselves. Fair Emplyment Practices statutes Individual state statutes that expand many f the prtectins prvided under federal laws. These laws increase the prtected classes t include such classificatins as sexual rientatin, transgender, medical cnditins, besity and thers. These laws als extend their reach s that they apply t even the smallest emplyers and als lengthen the statutes f limitatins. Additinally, the states have created Fair Emplyment Practices Agencies (r FEPAs) as the state equivalents t the EEOC. Cmmn Law Emplyees can als allege such trtius acts as vilatin f their civil rights, inflictin f emtinal distress, invasin f privacy and thers under cmmn law. Des the EPL endrsement prvide cverage fr claims brught by custmers and ther nn-emplyees? N. Our EPL insurance prvides cverage fr claims brught against an emplyer by a full-time, part-time, seasnal r temprary emplyee nly. Claims brught by individuals ther than emplyees, including independent cntractrs, are nt cvered. What limits and deductibles are available? We prvide $100,000 in EPL limits subject t a $5,000 deductible fr all eligible insureds. An ptinal limit f $250,000, alng with deductibles f $2,500, $10,000, r $25,000, is available. Limits f $500,000 and $1,000,000 are available by cntacting yur Cmmercial Lines Underwriter.

5 Des the EPL limit include defense csts? Yes. Defense csts are included within the limit f liability. That means that the limit is reached by a ttal f bth defense csts and indemnity payments. Hw d yu define small business is there a maximum emplyee cunt? Yes. The maximum is 50 emplyees r fewer per plicy regardless f the number f lcatins. Hwever, Umialik can ffer cverage n insureds with emplyees by cntacting yur Cmmercial Lines Underwriter. Are there any classes that are ineligible fr the prgram? Yes. While mst classes will be eligible fr ur EPL prgram, the fllwing classes are ineligible: law firms, emplyee leasing firms, temprary help firms, private glf clubs, municipalities, and schls. Hw will EPL cverage be ffered t existing plicyhlders? On new submissin qutes? An EPL cverage qute will be included with all eligible Umialik new and renewal plicies. The standard limit f $100,000 with a $5,000 deductible (unless therwise nted n the applicatin r renewal instructins) will be rated n emplyee cunt and included in ur qute r renewal ffer. EPL cverage will nly be included n new r renewal plicies by agent request. Is the EPL cverage written n a claims-made r ccurrence basis? EPL cverage is written n claims-made and reprted basis, meaning that a claim must be made against the insured and reprted t the primary carrier within the plicy perid (r within a subsequent renewal perid assuming there has been cntinuus cverage) and the wrngful act must have ccurred after the effective date f the first EPL plicy written (in ur partnership with HSB). When is the insured bligated t pay the deductible? Assuming a $5,000 deductible, the insured is respnsible fr the first $5,000 f cvered lss. Abve the deductible amunt, EPL insurance wuld pay additinal cvered lss within the limit f liability.

6 What type f legal representatin is prvided with the cverage? Our EPL cverage includes legal representatin by law firms specializing in emplyment law. In the event that a claim warrants defense, we will chse and retain ne f these law firms t represent the insured. Hw will this prtect ur agency frm an E&O claim? Our EPL prgram allws yu t prvide yur insureds with meaningful cverage at an affrdable premium in a very easy-t-administer manner. Cverage nt nly prtects insureds, it als prtects yur agency. If an insured suffers a lss and this cverage was nt ffered, yur agency may have an increased expsure t an E&O claim.