Employment Practices Liability: Why it s so important to you and your company. Atlantic Specialty Lines

Transcription

1 Employment Practices Liability: Why it s so important to you and your company. Atlantic Specialty Lines

2 Why do you need Employment Practices Liability Insurance (EPL) WHY YOU NEED EPL: Charges against employers for discrimination harassment, wrongful termination, retaliation, and wage-and-hour violations are at all-time highs. The legal landscape for employers continues to change with the passage of laws like the Lilly Ledbetter Fair Pay Act of 2009 and the Americans with the Disabilities Act Amendments Act of Layoffs, downsizings, salary freezes and reductions in benefits can be used by past and present employees as evidence of tangible adverse employment actions to file charges of discrimination, harassment, retaliation and wrongful termination against employers. WHAT CAN YOU DO TO PROTECT YOURSELF? Purchase EPL coverage As you do with all insurance, look at the cost of transferring the risk: $150,000 = the average cost of defense $250,000 = the average jury award if the case goes to a verdict PRICELESS = settlements are private and not a matter of public record

3 Below are some of the key features our markets can offer: Our markets offer a Broad definition of Wrongful Employment Act They can cover: Discrimination, Harassment, Retaliation Wrongful Termination Workplace Torts and Negligent violations of certain employment laws. Sub-limit for Defense and Loss for Wage-and-Hour Claims (when available pending state and class restrictions) Defense Costs outside the Limit (when available pending state and class restrictions) Duty to Defend - We investigate, defend and, with your consent, negotiate the settlement of any Claim. Some of our markets can offer a Business Resource Center free HR hotline with unlimited number of calls and no time limits plus discounted HR services such as background checks and online HR training modules

4 EPL Claim Examples Discrimination/Wrongful Termination: A female Marketing Manager took leave subject to the Family Medical Leave Act (FMLA) upon the birth of her first child. She was terminated one month after her return to work for poor work performance and the company eliminated her position. There was no documentation of poor performance prior to her FMLA leave. Third Party Liability: A blind customer entered a local grocery store with his guide dog. The manager of the meat/deli department asked the customer to take his dog outside because he thought the dog presented a health hazard. The customer sued for violation of the Americans with Disabilities Act. Internet/ Liability: An employee who intended to a pornographic joke to only a single recipient accidentally pressed the wrong button, sending the off-color joke to the company s entire workforce. The employer made the employee send a follow-up apologizing to the workforce. Two months later, during a company downsizing, an employee sued for a hostile work environment and used the as evidence. Spousal Liability: The president of a company was being threatened with a sexual harassment suit by one of his employees. The president decided to transfer most of his assets into his wife s name in order to avoid being personally sued and subjecting his personal assets to any possible claim settlement against him. The employee later sued the president for sexual harassment. The suit named both the president and the president s wife because of her ownership interest in the president s assets. These assets were later subjected to the settlement provisions. Retaliation: An African American employee of a barge repair and painting firm complained to management that some of his coworkers were using racial slurs and jokes. His supervisor transferred him to an inside warehouse position at a reduced hourly rate stating that it would be better for him to work alone rather than be exposed to those workers. The employee later sued for discrimination and retaliation or reporting the discrimination.

5 Here are some statistics we want you to think about: A private company is more likely to have an employment practices claim than a general liability or property claim. 3 out of every 5 employers are sued by former employees 65% of all companies that have ever fired an employee have been hit with an employment related lawsuit The median compensatory award for all plaintiff verdicts has risen to $325,000 from the 2005 median of $250,000. Over 40% of all employment practices claims are brought against firms with less than 100 employees *Equal Employment Opportunity Commission EEOC*1