You’d like to think that your employees would never dream of filing charges against you or your business for discrimination, wrongful termination, harassment or sexual harassment. Unfortunately, it can, and does, happen.
These days, hiring, firing and day-to-day employee management can be a risky business. Responding to charges like these can cost thousands of dollars and months of investigation, even when the allegations are found to be groundless.
The Equal Employment Opportunities Commission (EEOC) reported that nearly 100,000 workplace discrimination charges were filed in 2012. The year-end data shows that retaliation, and race and sex discrimination, which includes allegations of sexual harassment and pregnancy discrimination, were the charges filed most frequently.
With Employment Practices Liability (EPL) insurance in place, you won’t have to face an employment claim on your own. It can help protect against liability damages and defense costs. All EPL charges must be defended, whether the charge is groundless or not.
Not sure if you need the coverage? Consider some of the costs.
“The initial administrative steps to respond to a claim could cost a business a minimum of $5,000 to $6,000,” said Paul J. Siegel, a partner at Jackson Lewis, which specializes in workplace law.
Case settlements vary, explained Todd Cincotta, EPL product manager with Hartford Steam Boiler, which works with ERIE in offering EPL coverage. “The average settlement is more than $20,000.”
Most EPL cases do not go to trial, less than 1 percent, but Siegel said trying a case could cost $100,000 or more. “If not resolved early, and especially after a motion for summary judgment is denied, settlements of up to $250,000 are not uncommon,” he said. According to recent Jury Verdict Research statistics, Siegel said a quarter of all cases settle in the $100,000 to $249,999 range, while awards for cases that proceed to trial can far exceed those amounts.
Mediation or investigation could also require several months:
- If the charge filed against your business is eligible for mediation, the average EEOC mediation case requires 84 days.
- If the charge is not dismissed by the EEOC and requires further investigation, an average EEOC investigation takes 182 days.
EPL coverage from Erie Insurance can help protect you and your business. It’s affordable coverage that is easy to add to your business policy as an endorsement. An additional premium or cost is required. With EPL coverage, you’ll have access to:
- An EPL resource website, which includes model employee handbooks, employment policies checklists and a library of web-based training topics.
- A legal helpline that connects you to an experienced attorney so you can talk about specific employment issues and concerns.
If a covered claim occurs, you’ll have access to claims professionals and attorneys who have experience in employment law.
Contact CNR First Insurance at 410-897-9890 to learn more about the benefits of Erie Insurance’s EPL coverage. Consider consulting your tax professional to determine whether your premium—the amount you pay for insurance coverage—may be a tax-deductible expense.