In today’s world, Employment Practices Liability Insurance (EPLI for short) is something that every company should be embracing, but not every company has. There have been several cases, that I’m sure you’ve heard about in the media, that demonstrate that employees are getting a better grasp on their rights, and are following up with legal action whenever they see an opportunity to.
EPLI Statistics as of today
Let’s talk facts; the numbers don’t lie:
- Businesses are 3X MORE likely to be sued by an employee than experience a fire
- Roughly 41.5% of employee lawsuits are brought against private companies with less than 100 employees
- The cost of settle out of court averages $75,000 and the average jury award hits $217,000 if you go to court and lose
- The average case can take 18 to 24 months to resolve, which can cause a lot of added stress on your business
These stats are alarming. With employees given more and more power by the year, it’s important that your business gets the protection it needs through EPLI.
However, even with the increased risk, 7 out of 10 businesses don’t purchase EPLI coverage on their business insurance policy, and 6 out of 10 businesses mistakenly think that they are covered under other existing insurance policies. Don’t fall victim to these statistics. Unless you have an EPLI policy in place, your business is not covered in the event of an employee lawsuit.
What are the top EPLI claims?
The most widely seen and most common EPLI claims are:
- Pregnancy Discrimination: With the Pregnancy Discrimination Act that was established in 1964, all employers must allow pregnant employees to stay at their jobs as long as they can continue to perform their duties. It also states that a prospective new employee can not be disqualified from a position because of a pregnancy.
- Illegal Background Checks: It’s important to fully comply with the Fair Credit Reporting Act requirements when performing background checks within your hiring process. The same goes for businesses that pull credit reports on any potential employers. These individuals must be notified in writing of the credit report request and the business must obtain written permission in order to request the report. Potential issues when using this method within your hiring process is that inaccurate data and errors on the credit report are a possibility.
- Unpaid Interns: there are many factors that determine whether an individual is an intern or an employee. Some factors include whether or not there is an educational component to the position, or if the duties involved are more similar to a current employee’s duties. We recommend that you have an expert review your internship program to ensure that you are following internship parameters set by the Department of Labor.
- Genetic Discrimination: It’s important to avoid asking for any family medical history information during your hiring process, to avoid going against laws set in place by the Genetic Information Nondiscrimination Information Act, which prohibits the use of any genetic information in decisions involving employment status.
Employment practices liability insurance is easy to obtain and affordable for any company. If your business isn’t properly protected with EPLI coverage, or you have any additional questions about these EPLI stats, give us a call at 860-684-5270 so we can make sure you have proper coverage you need.