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
- 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
- Sexual Harassment
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!