Could Your Employees Sue You?
Are You Covered for Discrimination, Wrongful Termination, or Sexual Harassment?
Employment Practices Liability Insurance provides coverage for your business when sued for issues involving Discrimination, Wrongful Termination and Sexual Harassment. This type of lawsuit is not covered by a General Liability or Workers Compensation policy, but may be your business' largest exposure. Your current, past and even prospective employees can sue you, and damages are typically in the range of $100,000's to $1,000,000's. One allegation from a past or prospective employee could destroy your business and cost you millions, not to mention the stress, embarrassment, and exposure to the public.
As an employer, you can be sued for sexual harassment and discrimination even if you are not directly involved. Simply having an awareness of a complaint or circumstance in your work place can substantiate employer's liability. In an office atmosphere, these disasters can start as simple as a bad joke sent in an email from one employee to another. Claims occur frequently in the hospitality industry, which coupled with frequent employee turnover has compounded the amount of litigation involving local restaurants, bars, and establishments. Employers have a duty to provide a workplace that is neither hostile nor offensive. Neglecting to do so can lead to the financial ruin of your business.
When you have to let an employee go, the news can be difficult to broach and if handled poorly, your business could be held liable for millions in damages. The most fundamental reason for terminating an employee transpires from his or her inability to perform duties of the job. Employers who are separating from an employee often make the mistake of confusing this message with other details, exaggeration, or small talk. Egregious employees might allege that you terminated them due their age, race, sex, disability, national origin or religion. You can be held liable for terminating an employee who has been ill for an extended period of time and has not returned to work. While clear communication and a signed separation agreement are terrific standards when releasing an employee, you should include Employment Practices Liability coverage in your insurance portfolio. Even frivolous suits can be extremely expensive in defense costs and legal fees.
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Federal laws including the Civil Rights Act, Family and Medical Leave Act, the Age Discrimination in Employment Act, Equal Pay Act, and Americans with Disabilities Act, all dictate the legal protections afforded to your employees. Many businesses have an understaffed or underqualified human resources department, and without a supported knowledge of the complexities of employment law, your company may be over exposed to potential litigation. Boynton Insurance Agency can help you secure insurance protection for Employment Practices Liability from a quality and affordable insurance carrier.