Why Employment Practices Liability Insurance is Crucial

Even relaxed offices can deal with employment liability lawsuits

Few things are more worrisome than being laid off, fired, or otherwise removed from a job. For many, a knee-jerk reaction is to file a lawsuit. While some claims are legitimate, many others are not. Fighting these claims is often a costly process for employers. The need for employment practices liability insurance (EPLI) for companies is obvious, but the best option available to you is to take steps to reduce EPLI claims before they happen.

Reasons given for filing EPLI claims

Racial discrimination is the number one complaint levied in discrimination cases. These cases account for nearly 36 percent of such suits annually. Gender-based complaints have accounted for around 30 percent of cases and disability-related complaints for 23 percent.

Transfers or departmental moves that are viewed as demotions by your employee could often lead to the filing of a claim as well. Retaliation is another common claim, cited in many EPLI cases where employees feel as though employers retaliate after accusations of discrimination or harassment have been made.

Anti-discriminatory policies can reduce exposures

Include these policies in employee handbooks, post them online, in break rooms, and teach them to all employees who work for you. By creating a corporate culture that does not tolerate discriminatory acts you take a necessary step towards its prevention. In addition to these public policies, you should also establish an auditing procedure to ensure the policies of the company are in keeping with the laws regarding workplace discrimination and harassment.

Proper documentation will reduce conflicts

It is important to document everything in order to provide a complete picture of each individual employee’s tenure at your place of business. Any reports where the employee has violated policies or otherwise committed offenses should exist as a verifiable paper trail, especially when it has resulted, either in part or entirely, in the employee’s dismissal from the company.

Businesses of all shapes and sizes need the coverage that employment practices liability insurance provides. Mainly because employees who are laid off during times when jobs are scarce are more inclined to sue for wrongful termination.