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Companies need to be proactive in their insurance coverage measures when it comes to protecting against various legal concerns, such as employee lawsuits. The costs related to claims from employees, for instance, can stagger companies and even put smaller operations out of business. And with discrimination lawsuits on the rise, opting for comprehensive coverage, such as Employment Practices Liability, companies can operate with more peace of mind.
Here’s a better look at what Employment Practices Liability is and some examples of when it can protect a business and its bottom line against employment lawsuits.
What is EPLI Coverage?
EPLI is a kind of liability insurance coverage for wrongful acts coming from the employment process. The most frequent types of claims related to EPLI coverage include sexual harassment, wrongful termination, discrimination, and employer retaliation.
The policy covers claims from a range of other kinds of inappropriate workplace conduct from supervisors and directors, including invasion of privacy, negligent evaluation, and defamation. Employment practices liability insurance provides protection for directors and officers, management personnel, and employees.
This coverage cost depends on the type of business in need, the number of employees they have, and various risk factors. The policies reimburse the client against the cost of defending a lawsuit in a court of law and for judgments and settlements. The policy covers legal costs, whether the company wins or loses the suit. Policies typically do not pay for damages or civil or criminal fines.
Publicized (and Real) Examples of EPLI Claims
Not all EPLI claims get public attention, especially when it comes to smaller companies. But allegations made against more prominent companies can still set an example for organizations of any size and scope for what to expect when sent to a courtroom.
Here are some real-life examples of EPLI claims and lawsuits that have made their way into the public eye in recent years.
- Nike: A 2018 class-action lawsuit was filed by two former employees of the athletics giant. The employees claimed they endured a hostile work culture while at Nike and were paid less and had fewer growth opportunities than their male colleagues.
- McDonald’s: The hamburger titan incurred a loss when a former employee claimed a manager grabbed her body at various times. The claim went on to describe a culture of mistreatment in the fast-food industry by supervisors. The lawsuit came at a time when the previous CEO, Steve Easterbrook, was being investigated for sexual relationships with subordinates.
- Alaska: An Alaskan mining company found itself in the legal hot seat after a female miner brought sexual discrimination allegations. The company ended up paying $690,000 to settle the lawsuit, which included denying promotions to the miner while men with less seniority or training got advancements.
About Mavon Insurance
At Mavon Insurance, we pride ourselves on our unique approach to insurance. We focus on integrity, communication, professionalism, respect and gratitude to help our clients succeed, and place business in specialized markets. For more information about our products, or to become an agent, contact us today at (855) 248-1480.