Business owners worried about discrimination or sexual harassment lawsuits will often purchase Employment Practices Liability Insurance (EPLI). However, many businesses fail to check to see if their EPLI policy covers an invasion of privacy.
What do we mean by ‘invasion of privacy’?
In California, a woman filed a lawsuit over the monitoring application her employer installed on her smartphone. Her objection was that the app tracked the phone’s location (and hers) even outside working hours.
Another suit alleged that company cameras were invading employee privacy during work breaks. External cameras caught two employees in an amorous situation outside while they were off the clock. The two workers sued for ‘invasion of privacy’ after they were fired. They won the lawsuit.
According to Nolo Press, these are the four most common types of invasion of privacy claims that could be covered by EPLI.
DECEPTION (intended or not)
If an employer fails to mention that they do random drug screenings and an employee fails to pass one, they can claim ‘deception.’ Whether the omission of information was on purpose or not, it can result in a lawsuit. The legal costs associated with the case would fall under your EPLI policy.
BREACH OF CONFIDENTIALITY
If your company keeps sensitive information, such as employee health screenings or even employment information (SSNs) you need EPLI. All it takes is one cyber attack and you could suddenly find yourself hit with multiple lawsuits. Cyber Insurance covers the costs associated with a breach, but EPLI covers you in situations that does not involve a hacker. Also, it has been estimated that only about 35% of companies have Cyber Insurance. The ideal situation would be to have both types of coverage in place.
It’s legal to install video cameras over cash registers or in storerooms to prevent employee theft. However, those same cameras can capture other behavior that your employees consider an invasion of privacy. Hidden video cameras could cause privacy issues.
HOURS OUTSIDE OF WORK
For the most part, an employer cannot monitor or dismiss an employee based on what they do apart from work. Many times, this is a gray area. What type of behavior reflects back on the company? When a worker acts in a way that hurts the company and you let them go, they can come back and claim that you invaded their privacy.
Make sure that your EPLI includes a definition of ‘breach of privacy’ and make sure you understand any exclusions having to do with privacy issues.
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. Contact us today and find out more about EPLI and how it can protect you from potentially catastrophic losses.