Employment Practices Liability


What is Employment Practices Liability?

This insurance coverage is designed to protect your firm, subsidiaries, directors and officers, natural person partners and trustees from the defense costs and damages for employment-related claims.

All employers, big or small, are subject to laws relating to employment practices, these can be federal, state, and/or local. Allegations can include wrongful termination, discrimination (sex, age, disability, race, color, etc.), workplace harassment, retaliation, and acts deriving from the employer-employee and employee-employee relationship.

Over 90,000 charges of workplace discrimination have been filed with the EEOC in each of the past five years.*

Typical claim scenarios:

Race discrimination – $305,000
A firm was sued for race discrimination in violation of the act which prohibits employment discrimination based on race, color, religion, sex and national origin. When the employee complained to his manager that other employees had made snide remarks about his background, he was terminated and filed a claim that he was terminated due to the color of his skin. He was awarded $225,000 in damages and the insurance company paid $80,000 in defense costs.

Multiple discrimination — $455,000
An advertising agency was sued by multiple employees, alleging discrimination and wrongful termination. Each employee had different allegations, however, they were all related to discrimination, such as age and disability, sexual orientation, and religion. The insurance company paid $85,000 in defense fees and settled for $375,000 in damages.

Risk Management resources:

With the substantial increase in Employment Practices claims up-to-date risk management education and resources are tools that every employer needs. Most insurance companies have online resources at no additional cost to you; many have a help-line to an attorney who specializes in employment law. These resources provide tools, such as ethics training, prevention training for workplace harassment, and web-based training for a multitude of employment issues.