Why Buy EPL?
No business owner would consider going without General Liability or Property insurance, yet an employer is more likely to have an Employment Practices Liability claim than a General Liability or Property claim.
Did you know…
- Over 40 percent of employment practices liability claims are brought against private employers with fewer than 100 employees
- In a recent survey, 73.5 percent of companies defended employment-related litigation over the last three years mainly including discrimination and wage and hour complaints
- The number one area for litigation over the past three years has been labor and employment matters
- Forty-seven percent of plaintiff verdicts are between $100,000 and $500,000, and the average cost of defense is $150,000
Recent claim examples
An insurance agency decided to lay off three employees with similar backgrounds and experience due to soft market conditions. Two of the employees were 58 and 34 years old. A month later the agency decided to re-hire the 34 year old. The 58 year old brought a suit for age discrimination.
An employee of a pool manufacturer complained to the owner that her supervisor was making inappropriate comments about her appearance and pressuring her to date him. Her supervisor subsequently reduced her hours and made working at the company so unpleasant for her that she resigned. She charged sexual harassment, hostile work environment and constructive discharge.
Third Party Discrimination
A hotel manager routinely stated “no vacancy” or charged a higher rate to certain guests based on their race and national origin to discourage them from staying at his hotel. A family that was charged a higher rate than initially quoted and then denied a room engaged an attorney to bring suit and is seeking others who have experienced the same treatment at this hotel.
The Evolving Legal Environment
Lilly Ledbetter Fair Pay Act of 2009 amends Federal discrimination laws so that each paycheck an employee receives extends the statute of limitations to file an unequal pay charge if it results “in whole or in part” from a prior discriminatory pay decision. The new law may also allow charges to be brought by non-employees, such as spouses of deceased employees.
Americans with Disabilities Act Amendments Act of 2008(ADAAA) went into effect on January 1, 2009, and broadened the definition of “disabled” from the original ADA, increasing the number of protected employees and increasing a business owner’s exposure to disability discrimination claims.
Age Discrimination in Employment Act of 1967 (ADEA) was broadened in 2005 and 2008 by two separate Supreme Court decisions. Employers can be sued for age discrimination if a practice, policy or employment criterion has a disproportionate and adverse impact on protected employees, even if the employer did not act with an intent to discriminate.
Employment Practices Liability Provides Protections Against Claims of:
- Wrongful termination
- Employment-related misrepresentation
- Negligent evaluation, training and supervision
- Failure to enforce adequate policies
- Wrongful discipline
- Wrongful deprivation of career opportunity
- Negligent violation of laws such as the Family Medical Leave Act (FMLA) and the Uniformed Services Employment and Re-employment Rights Act (USERRA)
- Wage and hour claims (coverage availability varies by carrier and state)