No one thinks they will be in a lawsuit.
“It will never happen to me.” That’s what so many business owners today think when they hear about employees taking their bosses to court. The vast majority of small business owners, entrepreneurs, managers and leaders genuinely believe that the chances of being sued by an employee are slim to none. Unfortunately, they are completely wrong. If they weren’t, insurance companies wouldn’t offer Employment Practices Liability Insurance, or EPLI for short. So let’s look at some common lawsuits employers face – and see how common they are.
What did you just say, boss?
One-in-four women have been sexually harassed at work.
Yes, you read that right. 25% of all women who work have reported being sexually harassed on the job. If you have any female employees, chances are at least one has been sexually harassed during working hours, most commonly by people in positions of authority. While in previous decades these actions were kept quiet or ignored, they now are being reported to the police, exposed to lawyers, and screamed out loud on social media.
And it may be even more common than that. One recent study found that “38 percent of women said they experienced sexual harassment at the workplace. ”
But it isn’t just being reported – it’s being taken to court. The EEOC, the government commission charged with handling these cases, reportedly collected “‘recovered $164.5 million for workers alleging harassment claims.’ And, as the article points out, this does NOT include legal fees. Many small businesses won’t be able to survive a legal hit like this, which is why EPL insurance is more important than ever.
So make sure you don’t think your business is immune to this risk. You don’t have to know about #MeToo to experience it.
Times have changed. Don’t be one of these.
More than half of all businesses have faced wrongful termination lawsuits.
Yup. According to our friends at CoverWallet, “60% of employers have faced an employee lawsuit in the previous five years...” These lawsuits are from an employer firing an employee on what they believe are completely legal grounds, but the employee disagrees and takes the employer to court. These lawsuits are incredibly common and can strike even when a business owner or manager feels there is no way that such a termination is beyond the scope of their authority. Many states are considered to be “at-will” states, where employees may be terminated for any reason. But some reason are illegal, no matter the circumstances. The most common reasons are:
- Breach of Contract.
While many of you know what these risks represent, I’ll go over them just to clarify. Discrimination is when you fire someone based on the following (but not limited to) factors: race, gender, age, religion, sexual orientation, ethnicity, disability, national origin and marital status. Breach of Contract is when an employee is terminated despite language in a pre-existing employment contract that would protect the employees status or otherwise prevent the termination. Retaliation is when an employer terminates (or a number of other activities such as cutting hours, verbally harassing, etc.) a worker as punishment for reporting unlawful behavior or otherwise cooperating with law or regulatory authorities, as well as other protected activities.
Keep in mind that this is not legal advice – if you are unsure if a situation with an employee may be the kind of thing that lands you in court, please talk to a lawyer. All we can do is warn you of the kinds of risks you and your business may find in the modern world. What happens in the courtroom is beyond our scope.
Whatever the case, know that there are lawyers out there right now who would love to talk to your employees about their situation at your business. Websites like this one advice employees not just on how to determine if they have been harassed or wrongfully terminated, but how to win the case as well.
And then my boss said, “This is no place for a lady.”
Your current business insurance policies don’t cover these risks.
That’s right – these risks are among the most common you will ever face, and yet your General Liability policy doesn’t protect you from a sexual harassment claim. While business owners are required to have Workers Compensation insurance, another incredibly common risk, they are not required to be protected from employment practices trouble.
There is a coverage that does cover this: Employment Practices Liability Insurance. If you do not have this vital protection, you are leaving yourself exposed to a danger that is only becoming more and more common in the current working world. Fill out the form below and ask how you can get EPLI – before something happens. At Alliance, we cannot stress this coverage enough, and think it should be a standard form of protection for everyone who employs other people.
It goes without saying that all businesses should treat their employees with the respect that they deserve. And yet these events continue to find their way to court rooms across the country with lawsuits everywhere going to trial. Take measures to treat your employees honorably and respectfully, but plan for the worst. Just like in auto insurance, being a safe driver is the best thing you can do for your safety and your pocket. But you still need auto insurance, because, as we all know, accidents happen.