As more lawsuits are filed, corporate American has sent sexual harassment insurance sales catapulting...
An estimated 60 percent of companies have been the target of at least one employment-related lawsuit in the past five years and more businesses are turning to a relatively new form of insurance designed to protect them against workplace liability.
Employment Practices Liability Insurance (EPLI) was developed in the 1980's to protect employers who find themselves the target of work-related lawsuits, including harassment, wrongful termination and discrimination.
According to the Western Insurance Information Service, between 1992-1996 the number of civil rights cases filed in federal court more than doubled from 10,771 to 23,152.
In 1995 the medium compensatory award nationally for a wrongful termination case was $219,000. In California, the average was only slightly lower at $210, 700 in 1996.
EPLI covers defense costs, judgements and settlements for the corporate entity, employees, former employees as well as directors and officers. Depending on the type of business, coverage is provided up to a limit of $50 million.
Deductibles range from $10,000 to $25,000. On the average, companies are spending $100,000 annually for EPLI coverage. Workers' compensation, bodily injury and property damage are not covered by EPLI.
Here are some tips to limit EPLI exposures in your business:
Instill tough "no tolerance" policies toward workplace harassment, discrimination and drug or alcohol abuse.
Develop an employee standards handbook that defines the skills and performance you expect for each position.
Measure an employee's performance on a regular basis.
We recommend you take the time to review your policy coverages as your company grows with your agent or broker.
It's also important to shop your insurance premium and coverages to see if you have the best available...