EPL insurance policies protect businesses from the financial costs incurred from employment-related lawsuits filed for a range of reasons, from wrongful termination to harassment to discrimination and so on. More than half of claims are filed against small businesses…however, less than two percent of businesses with fewer than 50 employees purchase EPL insurance.
- A recent Chubb survey found that 36 percent of private company executives understand the gravity of their exposure to EPL suits and 21 percent said they had an experience with an EPL suit in the last five years.
- While every EPL policy is different, a company with $1 million in sales and 50 employees can likely get a policy for about $7,000 per year—$10,000 if they also take out coverage protecting directors and officers in the event of liability lawsuits against them personally.
- The leading charge filed in discrimination cases is an allegation of racial discrimination, at 36 percent of cases, according to EEOC figures from 2009. Gender-based discrimination was alleged in 30 percent of cases.
- Age-based claims made up 24 percent
- Disabled claims tallied 23 percent.
In many cases, multiple allegations are made. One of the growing charges, according to the EEOC, is retaliation against employees for making discrimination claims, which can involve a job switch that the employee views as a demotion related to the initial claim.
“If you go to your supervisor and say you’ve been harassed by Joe, you can bring that claim to EEOC, but then if they decide to fire you or cut back your hours, that is the retaliation component,” says Tom Hams, Aon Risk Solutions’s EPL practice leader. “That retaliation component can survive much more than the allegation itself.” The employer may win on the allegation of whether or not you were discriminated against, but they may lose a case based on the retaliation claim for moving the complainant to a different job or office setting.