Employment Practices Liability Insurance, or EPLI, is becoming an increasingly important type of business insurance coverage for companies to purchase. In fact, it’s a huge risk for businesses with employees to operate without this particular type of insurance coverage.
We live in a world where the first thought among many upon being laid off, fired, or otherwise removed from their jobs is to file a lawsuit. Some claims are legitimate. Other claims are not. Fighting these claims is a costly process by itself. The best option available to you, is to take steps now to reduce EPLI claims before they happen.
Understand the Nature of EPLI Claims
Inc.com reports that the number one complaint levied in discrimination cases is of racial discrimination. These cases account for 36 percent of all such suits in 2009. Gender-based complaints account for 30 percent of cases and disability-related complaints for 23 percent.
Some cases include multiple allegations. It’s also important to note that transfers or departmental moves that are viewed as demotions by the employee often lead to claims as well. Retaliation is another common claim, cited in EPLI cases where employees feel as though employers retaliate after accusations of discrimination or harassment have been made.
Create Anti-Discriminatory Policies for Your Business
It’s not enough to create these policies. They need to be included in employee handbooks, posted online, posted in break rooms, and taught to all employees who work for you. These aren’t lip service policies. You need to create a corporate culture that does not tolerate acts of discrimination or harassment and everyone who works for you needs to know about it.
In addition to the public policies, you need to establish an auditing procedure to ensure the policies of your business are in keeping with the laws regarding workplace discrimination and harassment.
It is necessary, in this litigious society, to document all complaints, compliments, and challenges companies face with each and every employee. The good and the bad should be noted in order to provide a complete picture of the employee’s tenure at your place of business. Everything from the contract that was initially signed to any reports where the employee has violated policies or otherwise committed offenses that resulted, either in part or entirely, in the employee’s dismissal from the company must be included in order to provide a verifiable paper trail leading up to the firing of the employee.
Businesses of all shapes and sizes face EPLI claims. It’s not always a sign of intentional wrongdoing or even bad management. Sometimes, it’s a matter of timing. Employees who are laid off during times when jobs are scarce and the economy is tight are more inclined to sue for wrongful termination. Unfortunately, tight budgets often lead to more layoffs and insurance coverage gaps. Businesses can’t afford to allow their Employment Practices Liability Insurance coverage to lapse, especially in troubling economic times such as these.