Employment Practices Liability Insurance

I wanted to share a story about one of my clients. He was expanding his IT staffing business and hired a female recruiter /salesperson. This salesperson was emailing and interacting with the client’s operations staff at their offshore operations center. The emails started to turn more and more inappropriate, in a sexual way. The client is not sure who initiated the inappropriate emails but he now sees himself on the other side of a sexual harassment lawsuit. Needless to say the legal costs are great and he is scared to let any of these employee go. There is an insurance product that can protect your company from this type of exposure, Employment Practices Liability Insurance (ELPI). EPLI covers a business against claims by workers of the company, that their legal rights have been violated. Protection is provided against many types of employee lawsuits, including claims of: Sexual Harassment, Discrimination, Wrongful Termination, Breach of Employment Contract, and many others. The policies will reimburse your company against the costs of defending a lawsuit in court and for judgments and settlements. The policy covers legal costs if you win or lose the suit.

To prevent employee lawsuits, educate your managers and employees so that you minimize the problems in the first place. Create effective hiring and screening programs to avoid discrimination in hiring. Post corporate policies throughout the workplace and place them in employee so policies are clear to everyone. Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Make sure Supervisors know where the company stands on what behaviors are not permissible. Document everything that occurs and the steps your company is taking to prevent and solve employee disputes.  Contact us if you would like to learn more about employment practices liability insurance.