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PIAM News Article

Employment Practices Liability: What You Should Know

Employment practices liability is one of the first areas an attorney may reach for when it comes to a lawsuit. In fact, a small business is more likely to have an employment practices liability insurance (EPLI) claim than a property insurance claim. EPLI can protect your practice against damages for events relating to your workforce, including but not limited to: allegations against wrongful terminations, harassment, discrimination, defamation and unfair hiring/firing practices. Types of discrimination can include age, disability, equal compensation, national origin, pregnancy, race and retaliation. According to the Equal Employment Opportunity Commission, in 2009 there were 93,277 charges filed, the second-highest number ever reported. The highest annual number filings occurred in FY 2008, when 95,402 charges were filed.

In this economy companies of all sizes are being forced to make difficult staffing decisions, putting the business at risk for allegations relating to wrongful termination. These allegations are costly – usually running an average of over $100,000 for defense alone. Damage awards can be significantly higher.

How can you protect yourself? Remember to document everything. You should maintain written personnel files with detailed correspondence. Always have two people in the room when addressing a negative employee review or disciplinary proceeding. Make sure that any human resources, managerial or supervisory personnel are properly trained. It is also recommended that all employees receive some type of discriminatory practices and/or sexual harassment training. You should consider buying EPLI for your practice.

For more information call 800-522-7426

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