Understanding Your Employment Practices Liability Coverage to Decrease Risk in the Workplace

Mary Fessler January 8, 2018

Employment practice lawsuits can prove to be damaging financially and to a business’s reputation, no matter the size. According to the EEOC, there have been a record number of filings in 2017 and the average cost of employment practice claims has increased dramatically over the past ten years, with claims averaging settlement amounts between $173,000 and $200,000.

In the past, employers may not have considered carrying employment practices coverage to be a necessity. However, with the significant increase in employment related litigations, the need for this insurance coverage is more important than ever. Lawsuits involving retaliation, harassment, and discrimination due to race, sex and age have all increased dramatically in the past ten years. In addition, insurance carriers believe that the #metoo movement which started in October 2017, will likely cause an influx in claims reporting.

For employers, the best method of preventing employment discrimination in the workplace is becoming knowledgeable about what is expected and providing all employees with the policies and procedures required to work in a professional and balanced environment. Understanding the ever-changing employment landscape can help minimize an organization’s exposure to employment related claims.

Most employers who carry dedicated employment practices liability coverage through leading providers have access to the risk management resources offered through their insurance carrier. These resources include best practice videos, articles, checklists and sample employee handbooks designed to help you mitigate employment exposures.

Many insurance companies also partner with law firms that specialize in employment practices litigation. The partnership between the insurance carrier and the law firm may also provide insureds with the benefit of a complimentary legal hotline. This hotline offers general guidance in order to mitigate any potential employment related suits that could arise.

It is important to understand the services that are available to you as a policyholder of employment practices liability coverage and to use those resources as needed. An explanation of the resources available can typically be found in the onset of an EPL policy. A further review of the employment risk management services available can be discussed with your insurance broker.

About the Author:

Mary FesslerMary Fessler is a Client Manager with Oswald Companies and works in the Professional/Health and Human Services division of the Property & Casualty department. Her responsibilities include placement of specialty risk coverages, client contract reviews, coverage negotiations with carriers and performing policy audits. She has a special focus on technology and professional services companies. She has more than 15 years of experience in the insurance industry.

Related Articles:

Understanding Important Exclusions in Directors and Officers Liability Insurance
The Right Direction: Understand the Roles, Responsibilities and Liabilities of Board Participation