There are some issues that keep business owners up at night. And right at the top of the list is a discrimination or harassment suit.
While you hope this won’t ever happen in your own company, chances are it could. Employment practices liability insurance (EPLI) is there to cover a variety of situations that, unfortunately, have become all too prevalent in today’s work world.
- A male employee feels discriminated against because of his sexual orientation.
- A female employee may have been harassed by her manager because she is pregnant.
- An employee with a disability is berated by co-workers and feels that he has suffered emotional distress.
- An employee sues over what she believes is a wrongful termination because she is retiring within a year.
- A delivery person files a suit because he feels sexually harassed while at your place of business.
- A long-term employee sues because she believes she was unfairly passed over for a high-level job
These are some of the areas where business owners may find themselves vulnerable. This is particularly so for small to medium-sized businesses, where rules and procedures can be more lax than in a more formally organized larger corporation.
If you’re faced with a claim like those described above, EPLI offers coverage that will pay for the investigation and defense of the claim as well as provide a limit of insurance in the case of a judgment against you.
Minimize the Possibility of a Claim
While having EPLI is important, you’ll also want to be sure to take steps to prevent or minimize the likelihood of claims; a commitment to good employment practices is one of the more important tools in your executive liability toolkit.
Good employment practices start with a commitment by all levels of management to zero tolerance for any behavior that makes an employee feel uncomfortable.
The employee manual should include a clear, strong and consistent statement to this effect, and there should be annual mandatory seminars on harassment in the workplace.
Implement and communicate a procedure that will make employees feel safe reporting a situation that makes them feel uncomfortable. Make sure you have an open door policy to keep lines of communication open.
If there is a claim, immediately communicate with the person making the claim to assure him or her that these concerns are being taken seriously. Create an action plan to investigate all complaints. Be prepared to discipline and possibly terminate the offender if you find the claim is justified.
Find the Right Policy for You
Not all insurance carriers offer the same coverage and deductibles for EPLI. You’ll want to do some research and talk to your local, independent agent to find the right coverage for your company’s needs.
One million dollars in coverage can be included on your business owners policy for a minimum premium. If you want more coverage, you can ask for a quote through your general liability policy or purchase a separate EPLI policy.