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Home Services Business Insurance Employers Practices Liability Insurance

Employers Practices Liability Insurance

The employment arena has become complicated and litigious. The number of employment-related lawsuits has increased, and award levels are setting records. USA Today recently estimated that there are more than 150,000 wrongful employment practices complaints currently filed at state agencies and the Equal Employment Opportunity Commission (EEOC). The average damage award employers must pay in employment-related lawsuits is $650,000.'

Good human resource policies and well-trained managers help reduce the risk of employment practices-based suits. But, if an employee feels he or she has been unfairly treated, he or she can still take legal action. Companies and their employees need comprehensive protection. That's why they are turning to Chubb, a pioneer in employment practices liability insurance protection since 1992.

Employers can be subjected to a wide range of claims. Consider these loss scenarios. Whether they would be covered by insurance depends on the policy provisions and the specific facts of the situation, but you certainly need to consider how to best protect yourself So, ask your insurance agent or broker about protecting your company, its managers, employees and yourself with a comprehensive employment practices liability policy from Chubb.

Since 1992, employee claims have skyrocketed. Large and small companies alike face expensive legal action by current and former employees as well as job applicants -- even for errors made inadvertently. With awards for wrongful termination and gender discrimination averaging over $500,000 and defense costs running to $300,000 or more -- meritless claims included -- it's advisable to consider employment practice insurance.

Citing prohibitive expense, insurers have all but written employment practice claims out of general liability coverage. And don't count on extensions to Directors' and Officers' policies to pick up the slack either -- they rarely provide coverage for the company itself, which is where the greatest exposure lies. Likewise workers' compensation policies will no longer protect the employer from workers seeking "emotional distress" damages. The insurance industry's solution: the specially targeted Employment Practice Liability Insurance (EPLI) which covers defense, indemnity and often administrative hearings and actions, and frequently provide entity coverage.

Various EPLI policies with different terms and conditions are currently on the market, and should be researched thoroughly. An EPLI policy tailored to the company's needs coupled with a proactive employee practice program is the best approach to reducing and eventually eliminating employee claims.