“Perception is Reality”, while a lot of political concepts don’t always translate to real life, let alone insurance; in the context of Employment Practices Liability, how one party perceives an action can result in lawsuits being brought forward against an employer and their business. The elementary school game of “telephone”, where participants whisper a message around a circle, demonstrates that it is not always the intended message that is received. Even if the intent was not malicious, that doesn’t mean it might not offend or cause emotional harm to the recipient. It is important to remember, as we all come from different perspectives, we also have unique perceptions, interpretations and understandings of the same topics, comments, and behaviors. Should something be perceived differently and allegations arise, there is a duty to defend.
Don’t all business owners want to recruit and retain talent entering the workforce?! Say a business advertised on their social media outlets that they were looking to hire young producers. Say the same company had let an employee close to retirement age go – said employee might not have come to work in the last six months and have terrible performance metrics, but they could still bring forth suit that the company was advertising their intent to hire “young” talent, therefore discriminating against their age group. Now – was that the point of the recruitment post? No. Did the former employee have a suit for age discrimination due to the fact the organization put that in writing? Potentially. Would an EPL policy defend your business in such an instance and pay the resulting damages should the business be found negligent? Yes.
Not All EPL Policies Are Created Equal
What is an Employment Practices Liability (EPL) policy and why does WalkerHughes recommend your business needs it? EPL protects employers and their businesses against employee related claims such has discrimination, wrongful termination, sexual harassment, retaliation, emotional distress, invasion of privacy and more. Not only would such a policy pay resulting damages should an employer or business be found negligent, but all court costs and legal fees associated with the allegations are also included within this coverage. Not all EPL policies are created equal, it is important to review if your policy includes Third-Party Liability which would include coverage for allegations from customers, clients, or vendors would could allege misconduct from the insured or their business in addition to employees.
This line of business has been in the insurance marketplace since the 90’s, however, the “Me Too Movement” reflected in the media has caused a recent increase in claim activity. While 2015 marked the 50th Anniversary of the Equal Employment Opportunity Commission (EEOC), advancements with the internet and the ability to file online have contributed to the frequency of allegations brought forth through that channel. The EEOC is representing a lot of these claims, that ultimately could result in the issuance of a dismissal letter, but there is still an expense for the business to defend themselves throughout the investigation.
How can this coverage be carried, you might ask? Some BOP or Commercial Package Policies might include a low limit of EPL coverage as a sublimit to the policy. But it would be recommended to carry this coverage via stand-alone policy as coverages are higher and there are greater resources available for policyholders.
Get The Most 'Bang For Your Buck' By Reviewing Policyholder Services
There is an emphasis on the importance of the insurer's duty to defend, but what else should you be looking for when reviewing EPL policies? It is important to review the policyholder services available to make sure you are maximizing the resources available for your business. Our carrier partners specializing in this coverage feature robust, client focused online portals chock-full of resources. What can a policyholder expect to find in an EPL online portal? Think of it as outsourced resources for small business which can increase awareness and reduce risk.
Carriers specializing in EPL coverage solutions often provide access to a help line for their clients. By utilizing a help line, policyholders can call in and ask questions of claims professionals, loss prevention specialists and often-times contracted or on staff attorneys who specialize in employment law.
Additionally, resources could include training and literature on a variety of employment related topics including sexual harassment, discrimination, and wrongful termination. You might find yourself asking why these types of materials could be important? Often, business owners purchasing policies, learning about coverages and having annual reviews with their agents are very aware of the risks facing their business. It is important for prevention that the same awareness trickle down throughout the workplace and all employees are also equally aware and trained appropriately. If your carrier provides resources via online toolkit to be shared with your staff, that helps save time, money and simplifies distributing this knowledge throughout your organization, that added value is worth checking out!
Interested In More Information?
Much like how not all EPL policies are the same, nor are the policyholder services they include, not all businesses are the same nor or the unique exposures to their operations. If you have questions on coverages, exposures or how to take advantage of these great resources for your own business, please contact one of our professionals for more information.