Employment Practices Liability
Commercial Lines
The most important asset for most businesses is its employees. However, managing a diverse and talented workforce is a challenge regardless of how well you hire, train, and treat your employees. No employee or employer is infallible; thus, mistakes will be made, conflict is inevitable.
This inevitable conflict represents one of the biggest threats’ employers face, Employment Related Lawsuits. These lawsuits can stem from many different alleged wrongful acts including Wrongful Termination, Workplace and Sexual Harassment, Discrimination, Wage and Hour Disputes, Hiring and Harboring Illegal Aliens, and Breach of Employment Contract.
What makes this risk so dangerous for employers is that the wrongful act does not have to be credible, only alleged, for an incident to become extremely costly. The cost to defend an Employment Related Lawsuit can be tens and even in the hundreds of thousands of dollars, regardless of the validity of the claim. Duty to Defend is a key coverage component in a sound Employment Practices Liability policy.
Judgements and settlements for suits that do have merit can cost even more, robbing the company of its critical operating capital. A recent actuarial study found that the average judgement cost of an adjudicated case to be $200,000, not including defense costs. Small to medium sized business have a 1 in 5 chance of facing employment related charges, with the likelihood being much greater for large businesses, according to the study.
Another benefit to most sound Employment Related Practices Liability policies is the HR consulting feature. This value-added component provides advice from HR professionals, often legal firms, on tough employment issues the insured business is facing. The underwriting process for this coverage also can provides much value because it often takes the employer though a checklist of HR risk management items which often illuminates areas of exposure.
Call Swarts, Manning & Associates today if you would like more information on Employment Related Practices Insurance.
