Employment Practices Liability - A Fast Growing Concern For All Employers
Many successful businesses will agree that their employees are their biggest asset. While that often holds true - employees can also be one of a company's greatest liability exposure. All businesses, regardless of size, have the potential for being sued due to alleged workplace issues of unfair hiring practices, wrongful termination, failure to promote, discrimination and sexual harassment.

Over the past eight years there has been a steady increase in the number of Employment Practice Liability lawsuits being filed. Our courts are awarding substantial damages to employees, ex-employees and even job applicants for both willful and inadvertent errors on the part of employers. According to the Equal Opportunity Commission, claims alleging workplace discrimination produce an average court award of $300,000! With the enormous court awards combined with the growing publicity (Texaco, Circuit City and Mitsubishi) about specific cases , there is a greater awareness by companies and non-profit organizations for the need to insure against sexual harassment, discrimination, and wrongful termination by past and present employees.

While most business owners know about "standard" liability insurance coverage - many are unaware that Employment Practice Liability policies are available. The current standard insurance policies in the marketplace do not provide adequate coverage for these exposures. General Liability policies generally includes an "Employee Related Practices Exclusion". Similarly, coverage for these claims is omitted from the employers liability section of the worker' compensation forms. To fill this coverage need, the Employment Practices Liability Insurance Policy has been developed.

The Employment Practices Liability policy is a named perils policy which covers law suits brought by a past, present, or prospective employee for wrongful termination, discrimination, or sexual harassment. It provides coverage to the directors, officers, managerial employees and for the business itself.

There are several ways your company can manage their Employment Practice Liability Risks:

1. Establish written personnel policies that specifically ban sexual harassment, discrimination, and wrongful discharge.
2. Provide training to employees on sexual harassment and discrimination prevention.
3. Get several competitive bids for EPL insurance and evaluate them with your insurance agent.
4. Continually educate and train all supervisory and management personnel in employment practices exposures.
5. Maintain good employee relations.
6. Quickly investigate any complaint of on-the-job discrimination, harassment or wrongful discharge.

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