Employment Practices Liability insurance offers valuable coverage that protects your business against employment-related claims alleging:

• Discrimination
• Harassment
• Failure to hire or promote
• Wrongful termination
• Retaliation, etc.

Why You Need Protection

If you think your chances of being sued by any of your employees are one in a million...think again. Employment-related lawsuits have reached unprecedented levels. According to statistics published by the Equal Employment Opportunity Commission (EEOC) in March 2009, discrimination claims increased 13% from 2007 to 2008 with a record 95,402 claims filed in 2008, up 15% from 2007. Age discrimination claims account for almost 26% of these claims—up 22% from 2007—and more than 34% include retaliation complaints, up 18% (almost double from 2007).

According to the 2008 Jury Verdict Research report on employment practice cases, employees win these cases 61% of the time. In addition:

• The average overall jury award is $252,000.
• The average overall settlement is $75,000.
• Average legal defense costs are $120,000 per claim.

Employment law is unique because it requires employers to pay (if they lose) the costs of the employee’s (plaintiff) attorney fees in addition to the judgments awarded. Even an organization with sound human resources policies and procedures in place can be sued, and the cost of defending a claim can be enormous. It is not uncommon for legal fees associated with winning an employment lawsuit to exceed $250,000. When you’ve spent that much on legal fees, it’s hard to feel like you’ve won anything. You’ve worked too hard and sacrificed so much to build a successful business. Don’t let the actions of others put your business at financial risk.

Employment Practices Liability Claims Examples

Sexual harassment and discrimination — $775,000

A former employee claimed she was subject to sexual harassment, discrimination and retaliation. After complaining to human resources that her manager had verbally harassed her on a number of occasions and had touched her inappropriately on two or three occasions, the plaintiff claimed she was retaliated against and terminated. She sued for sexual harassment, retaliation, wrongful termination in violation of public policy, intentional infliction of emotional distress, negligent infliction of emotional distress and assault. The insurance carrier paid more than $225,000 to defend the claim and paid $550,000 in settlement costs.

Breach of an implied contract — $265,000

A former employee sued a technology company, alleging that he was hired to be the VP of Sales and Marketing. He claimed that items promised to him were taken away (i.e., secretary, car allowance, staff levels, etc.) and that when he allegedly failed to meet sales targets, he was wrongfully terminated. The plaintiff brought various breach of contract claims, including a claim for a breach of an implied agreement, which sought to recover benefits, punitive damages, interest and fees. After numerous failed mediations, the matter settled for $200,000, with $65,000 in legal defense fees.

Age discrimination — $317,500

The employee alleged that the employer discriminated against him on the basis of his age and disability. He further alleged that he was terminated in retaliation for filing a workers compensation claim and for complaining about discrimination. The defendant (employer) contended that the plaintiff (employee) was not able to perform the essential functions of the job and that he was discharged for legitimate, nondiscriminatory and non-retaliatory reasons. The insurance carrier paid $175,000 in defense fees and $142,500 in settlement costs.

Discrimination — $675,000

Three former employees of a regional express package delivery service sued the company, alleging discrimination and wrongful termination. Although there were differences in each of the plaintiffs’ allegations, the claims all arose out of discrimination based on sexual orientation, marital status and religion. In addition to claiming wrongful termination based on discrimination, two of the three plaintiffs alleged that their terminations were related to complaints about failure to pay overtime. The third employee claimed she was terminated after complaining that two employees were being treated differently regarding their sick leave. The insurance carrier paid $100,000 in legal defense fees and ultimately settled the case for $575,000.

Get the protection you need tomorrow, today.

To learn more about our Employment Practices Liability insurance products, speak with one of our experienced professionals today.