Raise your hand if you love getting sued? Cool. Me neither.
Have you ever seen the TV show The Office?
Remember Toby that HR guy? HR often times gets such a bad wrap. They’re known as the rule followers and sometimes even the fun suckers, but for me personally they are some of my favorite people.
Everyone HATED Toby because he was always making sure HR protocols were being followed. Personally, I loved Toby!
HR is crucial in today’s world more so now than any other time with today’s mantra being sue first, ask questions later.
Making sure that you’re following FMLA protocol, hiring and firing procedures, documenting everything, and offering a good work environment are some huge factors when it comes to best employer practices.
It can be confusing to keep up with so many different practices, but there is too much at stake for a small or large business not to keep up.
Why is it so important you might ask?
What most people don’t understand is that you can be sued for anything - regardless of fault!
What happens when you get sued?
You have to defend yourself....even if there is no reasonable cause...even if it’s only to have the judge dismiss it.
Defending can take time, energy, and money that you may not necessarily have in your pocket.
When it comes to your commercial insurance for your business there are few coverage’s that are more important than Employment Practices Liability also known as EPLI. Why?
Because employees and people can be unpredictable and so often procedures, comments, or actions of a small business if not monitored and done right can open up a real can of worms.
Employment Practices Liability coverage is going to pay for the defense coverage for lawsuits against your business regarding discrimination, sexual harassment, wrongful termination, etc. It doesn’t have to just be employee vs employer either.
Dan owned an insurance agency and hired his Grandma to be the front desk receptionist. Grandma was always outgoing and made the customers feel good. Every day the UPS man would deliver their packages and Grandma being the playful lady that she was would jokingly sing “Who Wears Short Shorts” to him. After a couple of months a summons showed up and Grandma was being sued for sexual harassment. Because Grandma was on the job their Employment Practices Liability paid to defend. Unfortunately this is a true story where something most likely very innocent turned into something larger.
- Average 275 Days for EPLI matter to be resolved
- 45% of claims are brought against small businesses with 100 employees are less.
- Average court costs and legal fees when settled out of court: $10,000 to $50,000
- Average court costs and legal fees when the case is dismissed: $10,000 to $15,000
- Average court costs and legal fees when the case goes to trial: $150,000 to $200,000
- An Average policy typically costs between $1,000-$2,500 depending on the size of your business. It can also be included on your BOP or Commercial Package Policy.
The EEOC (Equal Employment Opportunity Commission) is a great resource for double-checking that your business is performing great HR practices or getting some ideas on how to do better. As with everything, you don’t know what you don’t know so double check that you’re covered. A knowledgeable agent or risk manager that handles your commercial insurance should also be able to give you some insight.
If you have questions regarding your insurance, ECI is always here.