Employment Practices Liability Trends to Watch in 2021
As an employer, you care about making your workforce feel valued and managing your organization successfully. However, even if you do everything you can to ensure smooth relationships with your staff, employment practices liability (EPL) risks remain. That’s why it’s crucial for your organization to have EPL coverage. Such a policy can offer protection for claims that result from employees alleging various employment-related issues—such as discrimination, harassment and wrongful termination. Apart from securing EPL coverage, it’s important to stay up to date on the latest Employment Practices Liability trends. In doing so, your organization will have the information needed to respond appropriately and make any necessary coverage adjustments. Don’t let your organization fall behind in this evolving risk landscape. Review this guidance to learn more about EPL trends to watch in 2021.
The COVID-19 PandemicandEmployment Practices Liability Trends
The ongoing COVID-19 pandemic has forced many organizations to make serious workplace changes—such as having employees work remotely, adjusting office setups or conducting significant staff layoffs or furloughs. And with these changes, EPL claims followed. Some of the most common, pandemic-related EPL claims include:
Allegations that unsafe working conditions or minimal precautionary measures (e.g., poor sanitation practices, a lack of social distancing protocols or inadequate personal protective equipment) contributed to employees getting sick or dying from COVID-19
Allegations of retaliation after an objection to unsafe working conditions or workplace exposure to individuals displaying COVID-19 symptoms
Allegations of disability discrimination related to remote working (e.g., failing to accommodate remote staff or denying employees the option to work remotely)
Allegations related to employee leave concerns (e.g., forcing staff to take leave, retaliating against employees that take leave due to COVID-19 or not allowing staff to take leave due to COVID-19 altogether)
Allegations of laying off or furloughing staff without providing proper employment notices
Allegations of discrimination related to laying off or furloughing employees
With these trends in mind, it’s crucial to fully document and review any organizational changes created by the COVID-19 pandemic. These changes should be reviewed to ensure they adequately consider the needs of your workforce and are compliant with employment law.
Social Movements
Several social movements have led to an increase in Employment Practices Liability trends and claims in recent years, including the #MeToo movement and the Black Lives Matter movement.
The #MeToo movement—which is an anti-sexual harassment campaign that was originally founded in 2006 and has gained significant social media attention since 2017—largely contributed to a 50% rise in sexual harassment lawsuits against employers over the past few years, according to the U.S. Equal Employment Opportunity Commission (EEOC). This movement emphasizes how important it is for employers to implement effective sexual harassment prevention measures (e.g., a zero-tolerance policy and a sexual harassment awareness training program), reporting methods and response protocols.
The Black Lives Matter movement—which is a racial justice campaign that was originally founded in 2013 and resurged in 2020 in the form of nationwide protests—has the potential to become a driving factor in race-related workplace discrimination and harassment lawsuits. This movement makes it increasingly vital for your organization to take steps to promote diversity, acceptance and inclusion in the workplace, as well as take any accusations or reports of racism seriously.
LGBTQ+ Protections
Although the EEOC had previously released guidance stating that workplace discrimination and harassment based on sexual orientation, gender identity and gender expression violated Title VII of the Civil Rights Act of 1964, the U.S. Supreme Court just recently confirmed in 2020 that Title VII protects gay and transgender employees from such treatment. While this is a relatively new development, the Supreme Court’s decision highlights the need for your organization to ensure all LGBTQ+ employees feel properly supported in the workplace.
Age Discrimination
According to the U.S. Bureau of Labor Statistics, the share of employees over the age of 55 in the labor force is expected to rise to nearly 25% by 2024 (up from 13% in 2001). This demographic shift makes it increasingly important for employers to take steps to minimize the potential for age discrimination issues within the workplace. After all, the Age Discrimination in Employment Act (ADEA) forbids age discrimination against employees and job applicants aged 40 and over.
Despite the ADEA; however, a recent Hiscox study found that 21% of U.S. employees have reported experiencing workplace discrimination based on their age. Such discrimination can lead to poor staff morale, a tarnished organizational reputation and an increase in EPL claims. With this in mind, it’s important to review your organization’s employment practices to ensure you are fostering a workplace culture that rejects ageism.
Wage, Leave and Salary History
As wage and hour laws continue to change across the country, it’s critical that your organization regularly reviews state-specific legislation related to minimum wage, employee classifications (e.g., hourly or salaried), overtime pay, sick leave and other paid time off. A failure to provide your staff with adequate wages or paid leave could lead to various EPL claims.
Employers’ ability to receive their employees’ prior salary history has also become a rising concern. In fact, in some states, recent legislation now prohibits employers from requesting or requiring salary history from a job applicant as a condition of being interviewed, hired or even considered for a position. In light of these changes, it’s best to speak with legal counsel for state-specific employee wage, leave and salary history guidance.
Marijuana Legalization and Employment Practices Liability Trends
Following the 2020 election results, medical marijuana is now legal in 36 states and recreational marijuana is now legal in 15 states. As marijuana legalization becomes increasingly commonplace across the country, it’s crucial for your organization to review any state-specific legislation and adjust workplace policies and procedures accordingly.
Specifically, some states have enacted legislation that restricts an employers’ ability to conduct drug tests for marijuana. Further, several state court cases have ruled in favor of the employee in recent employment lawsuits related to marijuana usage. This includes a case in which a disabled employee sued their employer for alleged workplace discrimination due to medical marijuana usage, as well as a case in which an employee sued their employer for alleged wrongful termination due to a positive drug test for marijuana.
That being said, your organization may need to reconsider or revise procedures related to conducting workplace drug tests for marijuana or basing employment decisions on an employee’s marijuana usage, as these practices could potentially contribute to EPL claims. Be sure to consult legal counsel for state-specific compliance guidance on this topic.
We’re Here to Help
You don’t have to respond to this changing risk landscape alone. We’re here to help you navigate these EPL market trends with ease. For additional coverage guidance and solutions, contact us today.
California’s Leader in Insurance and Risk Management
As one of the fastest-growing agencies in California, GDI Insurance Agency, Inc. is able to provide its clients with the latest and greatest of what the insurance industry has to offer and much, much more. The GDI team has developed an “insurance cost reduction” quoting plan, that provides you with the best coverage at the best rate!
We are headquartered in Turlock, CA, with locations across the heart of California’s Central Valley, Northern California and beyond to provide a local feel to the solutions and services we provide our clients. We pride ourselves on exceeding our client’s expectations in every interaction to make sure that our client’s know how much we value and appreciate their business.
California Sexual Harassment Prevention Training FAQ
SB 1343 requires that all employers of 5 or more employees provide 1 hour of California sexual harassment prevention training and abusive conduct prevention training to non-managerial employees and 2 hours of sexual harassment and abusive conduct prevention training to managerial employees once every two years. Existing law requires the training to include harassment based on gender identity, gender expression, and sexual orientation and to include practical examples of such harassment and to be provided by trainers or educators with knowledge and expertise in those areas. The bill also requires the Department to produce and post both training courses to its website, which employers may utilize instead of hiring a trainer.
An employer is required to train its California-based employees so long as it employs 5 or more employees anywhere, even if they do not work at the same location and even if not all of them work or reside in California.
Under the DFEH’s regulations, the definition of “employee” for training purposes includes full-time, part-time, and temporary employees, unpaid interns, unpaid volunteers, and persons providing services pursuant to a contract (independent contractors) Click the below toolkit for additional tools, including a sample sexual harassment and abusive conduct prevention training:
NEW UPDATE: By what date must employees be trained?
All employees must now receive training by January 1, 20211. Employers of 50 or more employees have an existing and ongoing obligation to train new supervisory employees within six months of assuming their supervisory position. Beginning January 1, 2021, new supervisory employees in workplaces of 5 or more employees must be trained within six months of assuming their supervisory position, and new nonsupervisory employees must be trained within six months of hire. Employees must be retrained once every two years.
NEW UPDATE: What if the employees are seasonal, temporary or otherwise work for less than six months?
Employers are required to provide training within 30 calendar days after the hire date or within 100 hours worked, whichever occurs first, beginning January 1, 20212. Employers are not required to train employees who are employed for fewer than 30 calendar days and work for fewer than 100 hours.
In the case of a temporary employee employed by a temporary services employer, as defined in Section 201.3 of the Labor Code, to perform services for clients, the training shall be provided by the temporary services employer, not the client
NEW UPDATE: When will the Department of Fair Employment and Housing’s online training courses be available?
SB 1343 requires that DFEH make online training courses available on the prevention of sexual harassment and abusive conduct in the workplace. DFEH expects to have all trainings available by July 30, 2020. In the interim period, DFEH is offering a SEXUAL HARASSMENT AND ABUSIVE CONDUCT PREVENTION TOOLKIT, including a sample sexual harassment and abusive conduct prevention training. Employers may use the training in conjunction with an eligible trainer to provide sexual harassment and abusive conduct prevention training.
SB 778 signed by Governor Newsom on 8/30/19 amended existing law to change deadline of harassment training until 1/1/2021.
2SB 530 signed by Governor Newsom on 10/10/19 amended existing law to change deadline to 1/1/2021 for seasonal and temporary worker harassment training compliance.
SEXUAL HARASSMENT PREVENTION TRAINING FAQ
Do employers need to train independent contractors, volunteers, and unpaid interns?
No, it is not required that employers train independent contractors, volunteers, and unpaid interns. However, in determining whether an employer meets the threshold of having 5 employees and being subject to the harassment prevention training requirement, independent contractors, volunteers, and unpaid interns must be counted. For example, if an employer has 2 full time employees and 6 unpaid interns, the employer would meet the training threshold requirement and would need to ensure the two full time employees receive training only.
What if a supervisor or non-supervisory employee has received the training in compliance with 12950.1 within the prior two years either from a current, a prior or alternate, or a joint employer? Do they have to retake the training again?
No. Supervisors do not need to retake the training. But their new, alternate or joint employer must give them the employer’s anti-harassment policy, require them to read it, and require them to acknowledge receipt of it. This must happen within six months of the supervisor assuming their new supervisory position (or within six months of the creation of a new business or the expansion of a business that was previously not required to provide training). However, the current employer is responsible for ensuring that all supervisors have fulfilled the training requirement contained in 12950.1, which may require verifying compliance from the prior, alternate, or joint employer.
For non-supervisory employees who received harassment prevention training in compliance with 12950.1 from another employer within the prior two years, they must be required to read and to acknowledge receipt of the current employer’s anti-harassment policy. Again, the current employer will be responsible for ensuring that all non-supervisory staff have fulfilled the training requirement contained in 12950.1, which may require verifying compliance from the prior, alternate, or joint employer.
Does DFEH have a list of approved outside training providers, or can DFEH recommend or approve an outside training provider for my company to use?
DFEH does not approve training providers. DFEH cannot offer recommendations or approvals for other training providers.
I believe I may be eligible to become a trainer; how can I verify this?
There is currently no certification requirement for qualified trainers, and DFEH is unable to provide guidance as to whether one meets the qualifications of a trainer. If you believe you meet the requirements found in 2 CCR 11024, you may choose to offer your services as a trainer.
Does a trainer who is also an employee need to receive California sexual harassment prevention training in order for their employer to be compliant?
No. An individual who is a qualified training provider according to the regulations (and who does provide the training) does not need to participate in a separate sexual harassment prevention training for their employer to be in compliance with the training requirements.
What documentation is required for those who have completed the training?
The law requires employers to keep documentation of the training it has provided its employees for a minimum of two years, including but not limited to the names of the supervisory employees trained, the date of training, the sign-in sheet, a copy of all certificates of attendance or completion issued, the type of training, a copy of all written or recorded materials that comprise the training, and the name of the training provider. Examples of tracking individual compliance include a certificate and/or a sign-in sheet that includes a verification that trainees completed the training. Documentation of the training should not be sent to DFEH but should be kept on the employer’s premises.
If I have employees located outside of California, are they required to be trained?
No. While employees located inside and outside of California are counted in determining whether employers are covered under the Act, employees located outside of California are not themselves required to be trained.
What is meant by “effective interactive training”?
Effective interactive training can include any of the following:
Classroom training that is in-person, trainer-instruction, whose content is created by a trainer and provided to a supervisor by a trainer, in a setting removed from the supervisor’s daily duties.
E-learning that is individualized, interactive, computer-based training created by a trainer and an instructional designer that includes a link or directions on how to contact a trainer who shall be available to answer questions and to provide guidance within two business days after the question is asked.
The trainer shall maintain all written questions received, and all written responses or guidance provided, for a period of two years after the date of the response.
Webinar training that’s an internet-based seminar whose content is created and taught by a trainer and transmitted over the internet or intranet in realtime.
Other “effective interactive training” and education includes the use of audio, video or computer technology in conjunction with classroom, webinar and/or e-learning training.
If an employer utilizes a webinar as their effective interactive California Sexual Harassment Prevention training, can the training be watched in a large group at the same time?
Yes, but it is up to the employer to comply with the documentation procedures, including the following:
• An employer utilizing a webinar for its supervisors or non-supervisory employees must document and demonstrate that each supervisor and non-supervisory employee who was not physically present in the same room as the trainer nonetheless attended the entire training and actively participated with the training’s interactive content, discussion questions, hypothetical scenarios, polls, quizzes or tests, and activities.
• The webinar must provide an opportunity for all employees to ask questions, to have them answered and otherwise to seek guidance and assistance.
• For a period of two years after the date of the webinar, the employer shall maintain a copy of the webinar, all written materials used by the trainer and all written questions submitted during the webinar, and document all written responses or guidance the trainer provided during the webinar.
In addition to the California Sexual Harassment Prevention training (and corresponding process and procedures), is there anything else required?
Yes, every employer must post a poster developed by the Department regarding TRANSGENDER RIGHTS and SEXUAL HARASSMENT in a prominent and accessible location in the workplace.
Does the employer have to pay for sexual harassment and abusive conduct prevention training? Does the employer have to provide paid time for such training?
California law specifies that, “An employer…. shall provide” sexual harassment and abusive conduct prevention training. Gov. Code 12950.1(a)-(b). The Department is authorized to seek a court order that “the employer” has not complied with this requirement. Gov. Code 12950.1(f). This language makes clear that it is the employer’s – not the employee’s – responsibility to provide the required training, including any costs that may be incurred. This language also makes clear that employees may not be required to take such training during their personal time; the training must be “provided” by the employer as part of an individual’s employment.
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As one of the fastest growing agencies in California, GDI Insurance Agency, Inc. is able to provide its clients with the latest and greatest of what the insurance industry has to offer and much, much more. The GDI team has developed an “insurance cost reduction” quoting plan, that provides you with the best coverage at the best rate!
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Everyone knows that name-calling, teasing and other bullying behavior is unwelcome in the workplace. But what if the comments are veiled in humor? Jokes about “old farts” or “screen-obsessed millennials” might seem like acceptable office banter to some, but these comments may amount to ageism and could seriously impact an organization—and should be quickly snuffed out when noticed. It’s important to make generational jabs in the workplace unacceptable.
This article explains some of the ways offhand comments or generational jabs can affect a workplace and outlines steps employers can take to combat their spread.
The Scope of Ageist Comments
Ageism is a prejudice against people of certain ages. These views are typically seen in flippant comments that call attention to someone’s age. In practice, these prejudices can limit productivity, stifle communication and expand interpersonal rifts. Like other prejudices, ageist comments should not be tolerated in the workplace. And, given the labor market forecast, employers should be acting now.
There will be 42 million workers over the age of 55 in the workforce by 2026, according to the U.S. Bureau of Labor Statistics. Employers who wait to address ageism issues will be significantly disadvantaged among this population.
What Ageist Comments Look Like
Just like accusations of racism or sexism, some individuals may have different interpretations of an ageist situation. In other words, it’s sometimes difficult to prove that a comment or action was related to prejudiced views.
Regardless, employees should never have to question whether a comment or action was prejudiced—such behavior should be clearly defined as inappropriate. As such, here are some examples of ageist comments:
Using the phrase “OK, Boomer” in response to a colleague’s comment
Attributing a co-worker’s mistake to their age
Using phrases like “they’ve been around the block,” “at your age” or similar offhand remarks (no matter how innocuous the comments may seem)
Changing topics in a conversation and explaining it’s because one of the listeners won’t understand due to their age
Legal Considerations
Beyond interpersonal issues, seemingly harmless comments can leave room for age-discrimination cases. Age discrimination is a serious accusation, since age is a protected employment status (for workers ages 40 and older). Even though the burden of proof is on the employee, being faced with a lawsuit—regardless of fault—can be financially crippling. That’s why employers should do everything they can to address ageism and other discrimination periodically. Briefly addressing these issues in onboarding training may not be sufficient for protecting an organization from potential discrimination claims.
What Employers Can Do About Generational Jabs
Prohibiting ageist comments can help discourage their proliferation, but that doesn’t guarantee they’ll vanish. Prejudiced viewpoints may persist even if individuals aren’t speaking their minds. That’s why training can be valuable for reinforcing appropriate communication behavior.
Some employers are requiring workers to complete conflict resolution training as a way to combat ageism and other discriminatory views. In these trainings, employees can role-play and learn to see comments from other perspectives.
Other organizations are focusing on implicit bias training. This training focuses less on resolving apparent conflicts and more on informing participants of biases they may not know they have. This perspective can be especially valuable among diverse teams who are experiencing issues but are unsure as to the cause.
Generational Jabs in Your Workplace
Getting employees to stop cracking jokes isn’t likely to happen. However, thoughtful training can make them understand how damaging some jokes can be.
Don’t risk a potential age-discrimination claim. Assess how your organization addresses workplace prejudices and consider areas that need expanding.
Speak with GDI Insurance Agency, Inc. for more information on this and other workplace topics.
California’s Leader in Insurance and Risk Management
As one of the fastest growing agencies in California, GDI Insurance Agency, Inc. is able to provide its clients with the latest and greatest of what the insurance industry has to offer and much, much more. The GDI team has developed an “insurance cost reduction” quoting plan, that provides you with the best coverage at the best rate!
We are headquartered in Turlock, CA, with locations across the heart of California’s Central Valley, Northern California and beyond to provide a local feel to the solutions and services we provide our clients. We pride ourselves on exceeding our client’s expectations in every interaction to make sure that our client’s know how much we value and appreciate their business.
It is unfortunate that few Insurance Agents and/or Brokers are aware of the coverage enhancements available in modern Employment Practice Liability Insurance (EPLI) policies for accusations and claims from 3rd party ADA. And even more unfortunate is that many business owners do not know what is available coverage wise and how inexpensive those great enhancements can be.
3rd Party ADA Claims are nothing new in the realm of Employment Practices Liability and are traditionally explained in the following example:
A delivery carrier is delivering a package to the business. Unbeknownst to the business owner, the delivery professional makes an unwanted to unappreciated advance toward one of the employees of the business owner while he/she is signing for the package. This employee can now make a claim of a hostile work environment toward the business owner for the actions of the delivery professional (the 3rd party).
This is the type of example used by 100’s (if not 1,000’s) of agents and/or broker everyday. However what about other 3rd party type claims?
Americans with Disabilities Act (“ADA”) Claims from 3rd Parties
Customers and/or Guests of a business or to a business location can file ADA claims whether they actually become customers of the business or not. These types of claims are typically due to the ADA compliance of the space (building, suite, office, etc.) occupied by the business. These claims can cost a business 10’s of thousands of dollars and countless hours to defend. Then there are the damages and cost to remedy the space – but what if you are a tenant business and NOT the landowner?
Many business owners have heard horror stories where someone was blindsided by an ADA claim and was either devastated or completely put out of business; fortunately there is a preventative measure that can be taken and that is to ensure that your policies contain ALL the necessary bells and whistles.
The Number of Title III Lawsuits Tops 10,000 in 2018
The number of lawsuits filed in California increased by 54% from 2751 in 2017 to 4249 in 2018. This record-breaking California number does not even include the many state court filings.
According to ADA Title III, the number of ADA Title III lawsuits filed in federal court in 2018 hit a record high of 10,163 – up 34% from 2017 when the number was a mere 7,663. This is by far the highest number of annual filings since we started tracking these numbers in 2013, when the number of federal filings was only 2,722. In other words, the number of cases has more than tripled. The chart below shows the explosion in these types of suits
What is Causing the Drastic Increase in ADA Lawsuits?
There were close to 5,000 ADA lawsuits filed in federal court for alleged website violations in the first six months of 2018. According to an analysis by Seyfarth Shaw, a law firm that specializes in defending such cases. The firm predicted that the number of lawsuits will climb approximately 30% from 2017 to nearly 10,000 by the end of the year.
With online sales, reservations and job postings now a huge part of technology, advocates for the disabled say websites need to be as accessible to everyone, just as brick-and-mortar stores, restaurants and schools are.
Coverage IS Available for 3rd Party ADA Claims
The precaution to protect against 3rd Party ADA claims is already available to most business owners, but is sadly not offered by their Agent and/or Broker. Many EPLI policies can actually be endorsed to provide coverage for the business owner for these exact types of cases. As one would expect, the coverage provides for Defense Cost and Damages; however does not cover the remediation needed to bring a subject space up to compliance. Even with this, the cost of the coverage is typically minimal as compared to the cost of not protecting one’s business.
If you’d like to get a quote or are unsure if your current policy covers 3rd Party ADA claims, please visit our EPLI page.
California’s Leader in Insurance and Risk Management
As one of the fastest growing agencies in California, GDI Insurance Agency, Inc. is able to provide its clients with the latest and greatest of what the insurance industry has to offer and much, much more.
We are headquartered in Turlock, CA, with locations across the heart of California’s Central Valley, Northern California and beyond to provide a local feel to the solutions and services we provide our clients. We pride ourselves on exceeding our client’s expectations in every interaction to make sure that our client’s know how much we value and appreciate their business. Contact us today 1-209-634-2929 for your comprehensive EPLI insurance quote!
Matthew Davis, MBA, CPCU, AAI
Coverage can also be provided on a standalone basis for Property Owners, Landlords, Property Managers, and Real Estate Professionals – Ask us how we can help with those as well.
Employment-related lawsuits are a growing concern for employers of all sizes. As costs for litigation and damage awards climb, experts predict that employment liability will only become more complex. As a result, it is critical for employers to understand strategies to reduce small business EPL exposures and options to manage the risk.
Use These Strategies to Reduce Your Small Business EPL Exposures
Two effective risk management strategies include solid human resources practices and employment practices liability (EPL) insurance coverage, a policy used to cover your risk due to the ever-changing legal and employment environment.
There are three common employment-related lawsuits today:
Wrongful termination: The discharge of an employee for invalid reasons.
Discrimination: The denial of equal treatment of workers who are members of a protected class.
Sexual Harassment: When a worker is subject to unwelcome sexual advances, obscene or offensive remarks, or the failure to stop such behavior.
Employment Practices liability (EPL) insurance works hand-in-hand with your internal employment practices to provide the necessary resources to defend your company against a suit or to pay a claim. To best understand the strategies to reduce your small business EPL exposures and risk, it’s important to know the potential sources:
Recruitment
practices
Employment
applications
Employment offers
Employee orientation
Annual conduct
reviews
Enforcing
performance policies
Termination
Improper
documentation of the above items
To limit your
exposure, engaging in solid human resources practices is an important strategy
in reducing your company’s liability.
To verify your HR policies and best practices, conduct a thorough HR audit:
Verify that the Employee Handbook outlines all policies and terms of employment in clear and concise language
Require employees to sign an acknowledgement form for receipt of Handbook.
Develop training for supervisors including interview skills, performance reviews and a “zero-tolerance” policy.
Employment law
is often complex and varies depending on the jurisdiction. Well organized and
credible documents can demonstrate fair treatment, deter litigation, ensure
employee honesty and—should litigation occur—demonstrate the employer’s
actions.
In addition to
having the appropriate employment policies and HR best practices in place, EPL
insurance coverage is another useful risk management tool used to defend
against a suit or pay a claim. In fact, evidence of desirable practices and
policies will be required to obtain EPL coverage. Typically, the insurance underwriter
will require a copy of your employee handbook, which should cover the following
policies:
Sexual harassment
Discrimination
Equal opportunity
Disabled employees
and accommodations
Grievances
Employee discipline
Termination
Performance
evaluations
Internet
usage/employee privacy
Pregnancy leave
Internal job
postings
Hiring and
interviewing
Alternative dispute
Resolution/arbitration
Employment-at-will
Employment
application form
In addition, you
are usually required to provide the most recent annual report or SEC 10-K, the
list of entities proposed for the coverage, and most recent EEO-1 reports.
EPL insurance works hand-in-hand with your internal employment practices to provide the necessary resources to defend your company against a suit or to pay a claim. As with all of your risk-management needs, GDI Insurance Agency, Inc. is committed to assisting you in assessing your employment-related policies and helping you with strategies to reduce small business EPL exposures Call GDI Insurance Agency, Inc. today at 209-634-2929 to learn more about our effective risk management services.
Employment Practices Liability Insurance: Crucial for Small Businesses
According to a recent study, more than half of all claims filed for employment-related liabilities are against employers with fewer than 50 employees. Alarmingly, the study also reveals that not even 2 percent of small businesses have employment practices liability (EPL) coverage. This is why finding strategies to reduce small business EPL exposures is so important.
High Price Tag
Employment-related
claims can be extremely costly, especially in cases that drag on for years.
With a slow economy and increasing adoption of worker-friendly laws, these
cases are on the rise—in fact, discrimination claims have increased
significantly in the last 20 years. According to data from the Equal Employment
Opportunity Commission (EEOC), most claims are based on race, sex, age and
disability. Many small businesses cannot afford to pay these costs and keep
their company afloat.
What Puts Small Businesses at Risk?
Understandably,
it can be much more difficult for small businesses to defend themselves against
employment-related claims because they tend to have fewer resources and a
different work environment. Small businesses are particularly at risk for
employment-related claims for the following reasons:
Many have a minimal
staff and lack of in-house counsel and/or full human resources department to
rely on
Overall lack of
extensive recordkeeping on employee performance
More intimate
working environments may cause personal riffs during layoffs
An Affordable Solution
Fortunately, with employment-based lawsuits on the rise and the economy’s sluggish upward climb, EPL coverage is becoming more affordable. More insurers are beginning to offer EPL insurance policies with comprehensive coverage to smaller businesses to protect them in tough times. In fact, EPL insurance is becoming so important to the success of small businesses that it is being offered at more affordable prices and being tailored specifically for those smaller companies. With the average cost of an employment lawsuit exceeding $270,000, the potential return dwarfs the initial cost of EPL coverage. Talk to GDI Insurance Agency, Inc. to learn if this risk transfer option is right for your business.
California’s Leader in Insurance and Risk Management
As one of the fastest growing agencies in California, GDI Insurance Agency, Inc. is able to provide its clients with the latest and greatest of what the insurance industry has to offer and much, much more.
We are headquartered in Turlock, CA, with locations across the heart of California’s Central Valley, Northern California and beyond to provide a local feel to the solutions and services we provide our clients. We pride ourselves on exceeding our client’s expectations in every interaction to make sure that our client’s know how much we value and appreciate their business. Contact us today 1-209-634-2929 for your comprehensive employment practices liability insurance quote! #justaskgrant
Employment Practices Liability Insurance: Crucial for Small Businesses
From the time you start the pre-employment process until after the exit interview, you are vulnerable for a lawsuit. Nearly three out of five employers will be sued by a prospective, current or former employee while in business. While many suits are groundless, defending against them is costly and time-consuming. This is why Employment Practices Liability Insurance is necessary.
Contact GDI Insurance Agency Inc. today at 1-888-991-2929 to see how affordable employment practices liability insurance is. We are your business insurance specialists.
What Does Employment Practices Liability Mean?
It is the area of an employment law that deals with:
Wrongful termination
Sexual harassment
Discrimination
Invasion of privacy
False imprisonment
Breach of contract
Emotional distress
Wage and hour law violations
Employment Practices Liability Insurance protects you from the outrageous costs of defending your business in a lawsuit.
According to a recent study, more than half of all claims filed for employment-related liabilities are against employers with fewer than 50 employees. Alarmingly, the study also reveals that not even 2 percent of small businesses have employment practices liability (EPL) coverage.
High Cost of Lawsuits
Employment-related claims can be extremely costly, especially in cases that drag on for years. With increasing adoption of worker-friendly laws, these cases are on the rise—in fact, discrimination claims have increased significantly in the last 20 years. According to data from the Equal Employment Opportunity Commission (EEOC), most claims are based on race, sex, age and disability. Many small businesses cannot afford to pay these costs and keep their company afloat.
What Puts Small Businesses at Risk?
Understandably, it can be much more difficult for small businesses to defend themselves against employment-related claims because they tend to have fewer resources and a different work environment. Small businesses are particularly at risk for employment-related claims for the following reasons:
Many have a minimal staff and lack of in-house counsel and/or full human resources department to rely on
Overall lack of extensive recordkeeping on employee performance
More intimate working environments may cause personal riffs during layoffs
What’s Your Risk?
As a business leader, you make important personnel decisions on a daily basis. From hiring new workers to assigning duties, each of your decisions affects employees in a unique way. Although these actions are critical to running your business, they also create exposures that could lead to costly claims by employees or governmental regulators.
Even if they are not warranted, claims for wrongful employment practices can disrupt operations, damage your business’s reputation, hurt employee morale and negatively impact your bottom line. What’s worse, even if a business fosters a welcoming work environment and takes all of the necessary precautions to safeguard its employees, it can still face an employment practices liability claim.
Thankfully, businesses can rely on employment practices liability (EPL) insurance to protect against a wide range of wrongful employment practices claims, including:
Wrongful Termination
Discrimination
Sexual Harassment
Retaliation
EPL Insurance Is An Affordable Solution
Fortunately, with employment-based lawsuits on the rise and the economy’s upward climb, EPL coverage is becoming more affordable. More insurers are beginning to offer EPL insurance policies with comprehensive coverage to smaller businesses to protect them in tough times. In fact, EPL insurance is becoming so important to the success of small businesses that it is being offered at more affordable prices and being tailored specifically for those smaller companies. With the average cost of an employment lawsuit exceeding $270,000, the potential return dwarfs the initial cost of EPL coverage. Talk to GDI Insurance Agency, Inc. to learn if this risk transfer option is right for your business 1-888-991-2929.
California’s Leader in Insurance and Risk Management
As one of the fastest growing agencies in California, GDI Insurance Agency, Inc. is able to provide its clients with the latest and greatest of what the insurance industry has to offer and much more. With locations across the heart of California’s Central Valley and beyond to provide a local feel to the solutions and services we provide our clients.
We pride ourselves on exceeding our client’s expectations in every interaction to make sure that our client’s know how much we value and appreciate their business. Contact us today 1-209-634-2929 for your comprehensive business insurance quote!
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