Employment Practices Liability Insurance: Have Guidelines

Employment practices liability insurance (EPLI) covers you against claims made by your employees or candidates for employment that you did not hire. No matter the size of your company you are subject to federal, state and local laws regarding employment practices.  Large companies are generally the target for these types of lawsuits but 40% of the lawsuits involve companies that employee 1-15 employees. As most of the shops I have visited over the years fall into the 1-40 employee range there is certainly opportunity for exposure to EPLI risks.

Some examples of what these lawsuits can stem from are claims of:

• Sexual harassment
• Workplace bullying
• Discrimination
• Wrongful termination
• Breach of employment contracts
• Emotional stress

The good news is you can take steps to reduce your risk of being involved in these types of suits. By establishing guidelines for management and employees you will not only be protecting your business but making it a great place to work.

Employee handbooks are a great way to establish best practices for your management and employees. The handbook should consist of ways to communicate with management on harassment and other grievances. There also needs to be an established procedure for dealing with employee discipline. Handbooks should also contain all of the federal, state, and local regulatory compliance information as well. As a sign of the times you should also address your policy on social media and the workplace. There should be a requirement for all employees to read the handbook and acknowledge that they have read the handbook. There should be a record kept of that acknowledgement in case any future need may arise.

For employment you should develop clear and defined job descriptions. These descriptions should include all of the required capabilities to do that job including physical requirements. If the job requires a person to be able to lift a certain weight then that needs to be included in the job description. In the same line if there is an experience requirement there needs to be a clearly defined statement on the amount of relative experience required. Experience may be harder to define if your position is unique to your company.

In the end you will need to be up to date on all of the federal, state, and local laws to be successful at keeping these types of suite at bay. Treating your employees well and establishing defined ways to deal with employee issues will set you on the right course. There are always going to be people that will have grievances but it will be how you handle those grievances that will keep you out of trouble. 

Jamie Benthusen is a commercial insurance producer for FGMK Insurance based in Bannockburn, IL. He draws on his 16 years in the aviation industry to tailor insurance programs for the aviation industry. For more information you can reach him at [email protected].