Affordable Employment Practices Insurance:
A new form of liability insurance. It provides protection for
an employer against claims made by employees, former employees,
or potential employees. It covers discrimination (age, sex, race,
disability, etc.), wrongful termination of employment, sexual
harassment, and other employment-related allegations. It covers
your firm, including its Directors and Officers.
When do I need Employment Practices Liability Insurance?
Employment Practices Liability Insurance is needed as soon as
you start to hire employees. Most investors and directors will
require that you carry this coverage as part of your Directors
and Officers Liability Insurance since they can also be held liable
in suits relating to employment practices.
Why do I need Employment Practices Liability Insurance?
Cases against employers are on the rise. It is estimated that
three out of five firms will be sued by an employee. Companies
are finding that they are vulnerable from the pre-hiring process
through the exit interview, even if the employee was never hired,
or only at the company a matter of days.
It can happen to ANY firm. We have all experienced it. It could be a joke told in the break room, an employee you had to fire, a “friendly” programmer, or that person you chose not to hire. Every employer faces the reality that it will be the target of legal action from past, present and prospective employees. Even if the claim is groundless or fraudulent, the defense of a suit can be expensive in time, resources and financially.
New technology firms are especially vulnerable. Newer and fast growing companies are often prey to these types of claims because their management team has not yet designed or implemented procedures for hiring, firing, and disciplining employees.
We definitely recommend Employment Practices Liability Insurance
to any company that has employees.
