We recently spotlighted Employment Practices Liability Insurance (EPLI) and the types of claims that particular insurance covers.This is a hot topic right now and our office regularly receives a number of inquiries about EPLI.
Today, I would like to go into a bit more detail on the types of sexual harassment claims, so that you understand how to avoid this happening in your company. In particular, what happens when an employee acts inappropriately? Will EPLI protect you, the employer, from costly legal fees?
With the spotlight on Hollywood and the numerous claims of sexual misconduct appearing in the news, many business owners have started to think more about their own liability.
All it takes is an off-color joke, an inappropriate comment, or even an office romance gone bad to create an incident.
Since the Equal Employment Opportunity Commission (EEOC) began tracking the number of sexual harassment claims in 2000, the number of claims has risen 26%. (source). And it doesn’t look as if that number will go down.
According to one ic4p report, overall, employers expect sexual harassment claims to keep increasing, especially now that the topic is in the news almost daily. In fact, last year, U.S. companies spent an estimated $2.2 billion on EPLI and the market is expected to grow by $2.7 billion by 2019, according to MarketStance. (source)
Should You Worry About Sexual Harassment Claims?
The stats show that no company (with the possible exception of sole-proprietors), are immune to risk. Sexual harassment laws apply to all businesses regardless of size. Because of this, a greater number of small businesses are following the example of larger corporations and purchasing EPLI.
You may not realize that there are different forms of sexual harassment. California law separates sexual harassment into two types.
Quid Pro Quo Sexual Harassment
The first kind of harassment occurs when an employee is offered advancement or threatened with penalties as a consequence of sexual favors. The offer or threat can be overt or implied. A single instance can result in a lawsuit.
Hostile Work Environment
The second is when someone endures repeated harassment, verbally or physically, which allows them to claim a hostile work environment. If the courts do not feel that a company has addressed the situation appropriately, they can find the company liable for damages.
Protect Yourself with EPLI
Because of the current, global outrage related to sexual harassment, most companies are reviewing their sexual harassment policies and training. They are also contacting their commercial insurance agents to make sure they have adequate EPLI insurance to ensure their policy will cover legal fees and compensatory settlements.
If you employ more than one person and you have not reviewed your EPLI policy in the last year, you should call your agent today and ask about your coverage. He can give you more information on the amount and types of coverage that will best suit your needs.
How Can You Find Out More Information?
Post Insurance has served the needs of businesses in California for over 60 years. We provide all types of commercial insurance, including Employment Practices Liability Insurance at the most competitive rates. Post Insurance is the largest insurance agency in the area, representing over 50 different insurance companies. Contct us today and find out more about EPLI and how it can protect you from potentially catastrophic losses.