Protection for Employee Lawsuits

Protection for Employee Lawsuits

Many companies are quick to secure general liability insurance for issues arising with property damage or customer accidents and injury, but many overlook the importance of proper coverage for employee claims. Employment practices liability insurance works to provide the financial resource to present a defense whenever EPL claims are brought to trial, and it also offers assistance with settlement funding.

Larger corporations have contingencies in their insurance plans to address employee claims, but many small businesses feel they have no need of this coverage. Even though you may trust the people working for you, it is wise to have a backup plan when disgruntled employees present a claim. There are a few common scenarios that create the bulk of EPL claims.

1. Hostile work environment. This could include verbal attacks or written correspondence that leaves an employee feeling slighted or targeted.
2. Wrongful termination. Even when you file the appropriate paperwork and state accepted termination reasons, a terminated employee may seek damages if there is more to the story regarding his termination.
3. Sexual harassment. Females report more issues with this than males, but any individual can voice concerns over inappropriate gestures, comments, touch, or activity.

The financial cost to settle these claims can cost a small business more than the funds they have available. Investing in an insurance policy that covers employee claims can save your company from total loss when an employee brings suit against you.