Whether you are a large corporation or a small business, the employer/employee relationship has changed. In today’s world, employers can no longer assume all employment relationships will go smoothly. Employment claims can be distracting and emotional for business owners. They may feel betrayed by employees they’ve known and trusted.
Finding a suitable Employment Practices Liability Insurance (EPLI) program has become one of the single most important things owners and managers can do.
There are two new areas of Employment Practices Liability (EPL) concerns of which you need to be aware:
Improper Employee Evaluation
This is a one of the fastest growing kinds of EPLI claims. Employers who do not have any sort of performance review process, or do not have a thorough process can be sued. An employee may make a claim of negligent evaluation if the employer does not conduct fair and accurate reviews. An employee may also claim failure to promote if he or she is inaccurately evaluated or unfairly passed up for a promotion; often this is related to sex, age and race.
It may be hard to believe, but people who you don’t hire can sue you for not hiring them, if they believe the hiring process is not legal. Employers can face employment practices liability over the way they post the job or conduct the interview. Employers need to manage the hiring process to eliminate any discrimination in the language, application, and interviews.
Employment Practice Liability Insurance
Employment Practices Liability Insurance (EPLI) is designed to help employers respond to growing EPL exposures. Although coverage varies greatly, most EPLI policies cover claims for sexual harassment, discrimination, and wrongful termination.
This information is intended for the client, individual or entity to which it is addressed. These articles contain concepts and opinions, and are not intended to represent the consensus of the insurance or risk community, nor to provide professional legal or tax advice. Please seek professional legal or tax counsel before making any decisions. The information provided does not change or modify any insurance policy, only the actual terms of the in-force policies will govern claim settlements.