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October 2014

INSURANCE SERVICES

Delivering essential employee benefit and commercial insurance information to customers and our members EMPLOYMENT PR ACTICES LIABILITY INSUR ANCE

The Answer to Costly Employee Lawsuits If you have employees, your firm is at risk of complaints about your actions towards them. The costs of defending against an employee complaint or an Equal Employment Opportunity Commission charge can be enough to bury some firms. That’s why you need employment practices liability insurance. EPLI is written to: • Protect a company against damages for events relating to its workforce, including but not limited to: wrongful terminations, harassment, discrimination, defamation and unfair hiring/firing practices; and • Provide defense costs associated with responding to employment-related lawsuits.

Some examples of actions that could lead to EPL claims including the following real-life cases: RETALIATION The plaintiff alleges that she had her employment terminated because she testified on behalf of another worker, who had brought a separate action against the company. She alleges that this is a violation of her employment contract, which provides that she can only be terminated for good cause. The plaintiff accused the employer of breach of contract, wrongful termination and retaliation. Total defense and settlement costs:

Exceeding $120,000

WRONGFUL TERMINATION An executive of a manufacturing company files suit against the company for wrongful termination and intentional infliction of emotional distress. The plaintiff, a former chief operating officer, makes statements that the company improperly failed to pay an employee overtime and terminated the employee for filing a complaint. The plaintiff alleges that although the company advised him that his termination was due to performance problems, he was actually terminated in retaliation for his honest statements he made in connection with a fellow employee’s termination.

Five reasons your Business Needs EPLI Coverage 1. EPLI covers actual as well as alleged acts of discrimination, harassment, retaliation, wrongful termination and more. 2. 60% of firms are sued by ex-employees. 3. Some 40% of EPL claims are against firms with fewer than 100 employees. 4. The risk of not having EPLI can be crippling. The median cost of an EEOC lawsuit in 2013 exceeded $250,000. 5. There is no EPL coverage under other insurance policies.

Total defense and settlement costs:

Exceeding $750,000

DISABILITY DISCRIMINATION A worker was terminated while out on medical leave due to an injury that occurred at work. He asserts that he was the victim of numerous discriminatory and harassing actions and remarks regarding his disability. The plaintiff alleges he was advised that if he filed a workers’ compensation claim, he would be terminated. He was in fact terminated without disability benefits after he filed a workers’ comp claim. Total defense and settlement costs:

Exceeding $75,000

CLIENT TESTIMONIAL

Call us today about an EPLI policy at 800-659-3363. C O N TAC T U S

The VMA Insurance Team helped me sort out some workers comp issues saving me a significant amount of time and expense. — PIERRE MARTICHOUX | President, Chameleon Like

David Katz CA License #0712961 800-659-3363 david@vma.bz

RiskReport - 2014 Q4  

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