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The recent Boston bombings have brought a sobering reminder to the insurance world about Terrorism Insurance. Business Insurance policies exclude coverage from Acts of Terror unless a special TRIA rider is purchased.
So, many businesses in the Boston area who were affected by the bombings, may find themselves without insurance for property damage and loss of business income if they did not opt for that specific rider....
PEO's or Professional Employers Organizations, have been around for the better part of 20 years, yet remain a mystery to most business owners. When employers hear the phrase, PEO, or Staff Leasing Companies, the most common reactions are, "no, we prefer to have our own employees", or, "we don't use "temporary staffing", or "we're happy with the staff we have".
In reality, a PEO takes your existing employee pool, and becomes a co-employer with your company. It does not provide temporary staffing, it does not manage or supervise your employees or tell them how to do their job, and it certainly does not re-assign employees from one company to another. There is virtually no change in the day to day operations of the company. The only main difference is by virtue of membership in the PEO Staffing Company, the employees enjoy significant benefits at virtually no additional cost to the employer....
EPLI Coverage..... Heck no, I don't need it. We're all like family here.
Yes, everyone is like family, until the first accusation of sexual harassment, wrongful termination, favoritism, nepotism, gender discrimination, off color joke, retaliation discrimination, racial discrimination, computer monitoring, privacy invasion, FMLA, FLSA & ADA violation.... is voiced.
At that time, one is very quickly brought down to earth with the realization that this one big happy family, may not be very happy after all.
So, what is an EPLI policy? It is an Employment Practices Liability Insurance Policy. It is a policy so often overlooked in risk management assessments, but offers protection against one of the most frequent claims, i.e. an employment related claim. And, conversely, is one of the most affordable means to protect your company from a discrimination (age, sex, race, disability, wrongful termination, harassment) and other employment related allegations.
According to the Department of Labor, “employees and other plaintiffs won 41% of all jury trials, and 26% of all non jury trials, and punitive damages were assessed 19% of the time. The average verdict in EPL cases exceeds $500,000. Employment issues make up approximately 30% of all civil litigation in the US”. According to the experts at Chubb Insurance, 2013 will bring about a higher frequency of claims in Retaliation & ADA, and Increase in Social Media Claims, ie comments on Facebook, Twitter, MySpace etc.
In tough economic times, companies look for ways to reduce costs. Advertising and Insurance are usually the two areas most frequently hit in this downturn. However, it is precisely in these difficult economic times that the incidence of EPLI claims are on the rise. Employees who have been terminated and are unable to find a job will more often than not blame their employers for perceived wrongdoing and file a claim against their former employer with the EEOC.
A private company is more likely to have an EPL claim than a GL or Property Claim.
3 out of every 5 employers are sued by former employees.
65% of all companies that have ever fired an employee had an employment related lawsuit.
Over 40% of all EPL Claims are brought about against firms with less than 100 employees.
70% of employees are not in compliance with the Fair Labor Standards Act (FSLA)
State laws are broadening and increasing claims and the likelihood of guilty verdicts.
Which leads us to the question, “Who is the EEOC?”
“The U.S. Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. It is also illegal to discriminate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit”
Next question, what authority does the EEOC have?
“The EEOC has the authority to investigate charges of discrimination against employers who are covered by the law. Our role in an investigation is to fairly and accurately assess the allegations in the charge and then make a finding. If we find that discrimination has occurred, we will try to settle the charge. If we aren't successful, we have the authority to file a lawsuit to protect the rights of individuals and the interests of the public”. (source www.eeoc.gov)
A quick visit to www.eeoc.gov where the latest EEOC settlements are posted is reason enough for concern. The EEOC actively investigates charges of discrimination and seeks redress against companies of all sizes, large, small, private and public. All it takes is a phone call to report a tip, and set the wheels in motion.
The EEOC received a record 99,947 charges of discrimination in 2011. The staff delivered relief of $404,000,000 for victims of workplace discrimination.
The EEOC has the mandate to investigate all charges of discrimination. If a business does not have the resources to pay for EPL Insurance, they certainly do not have the resources to fight the EEOC who is the body responsible for investigating the alleged charges.
As the number of discrimination claims filed by employees continues to rise, employers need to find ways to protect themselves. Even if the employer did nothing wrong, and the suit is without merit, the employer will still have to pay for defense which could exceed $50,000 very quickly, depending on the complexity of the case and the nature of the charges brought against them. It is important to note that the mere charge of employment practices misconduct must be investigated & defended. Folks, this is serious!!! This is the new “slip and fall”.
This is where EPLI steps in. It covers allegations of discrimination, wrongful termination, sexual harassment, a variety of other employment related claims that violate employees' civil rights or their ability to perform their job in a fair, safe & acceptable environment. It provides defense and indemnifies the company for such claims brought against them.
Beyond defense, most EPLI policies offer the employer a Human Resource Hotline, free of charge. This Hotline is geared to making sure the employer has adequate counsel to discuss any employment related issue PRIOR to it becoming a potential EPL claim.
Think of it as your own in-house legal counsel who will walk you through the steps you need to take to counsel, discipline, and terminate an employee.
Another topic worth mentioning is the third party EPLI claim, where a claim is brought about by an employee / third party. Under the traditional EPLI, the wrongful act arises out of the interaction between employer and employee, ie. employment practice. The third party EPLI broadens the coverage to include anyone, clients, vendors, who has a contact with the business and the employees.
There are two basic instances of third party EPLI. One is where your employee claims to have been harassed by a third party, i.e. a vendor, a client, a “third party” who comes to your place of employment, a complaint was filed, and no action was ever taken to address that employee's concern.
The second is where an employee harasses or discriminates against a third party, someone outside of the company, while on the clock, a claim by a third party that one of your employees discriminated against them.
Attended a very informative class on Professional Liabilty exposure for Architects and Engineers.
Data breach...... how safe is your data?
This is a subject worthy of being re-visited, in a different light. Just how common is a data breach? More frequent than one would like to consider....
Non owned and hired auto coverage..... Why it is so essential for a business.
Hired and non owned vehicle coverage is an often overlooked component of your business General Liability coverage. It covers bodily injury and property damage caused by a rented vehicle or a vehicle owned by others, including vehicle owned by employees....
Commercial Insurance for Oil & Gas Contractors
Ray, nicely written article.
In response to these breaches and loss of confidential information, insurance companies are closely reviewing their policies. Broad endorsements are typically a thing of the past, and if quoted, come at a significantly higher premium....
Seeing this question more often than not on policy questionnaires. "DOES YOUR COMPANY HAVE A CELL PHONE POLICY?"...
Interesting take by the courts. How is your data protected? What safeguards do you have in place? Now may be a good time to review your data policy use in your company handbook.
Fire Legal Liability
Do you rent space to operate your business? Fire Legal Liability insurance limit is the most the insurance company will pay for...
property damages to property occupied by the insured which is damaged by fire due to the insured's negligence. Most limits are usually set at $50,000 or $100,000, which may not be nearly enough if the building is worth $1,000,000 and your business occupies ¼ of that building. Under the above scenario, the minimum limits should be $250,000.
Call us today at 281-930-1600 for your FREE Risk Analysis
Product and Professional Liability?
Which one is right with me?
We get asked this question too frequently. “I own a small manufacturing company, do I need Product Liability or Professional liability?” or “We overhaul transmissions, do we need Product or Professional Liability?”...
The answer is of course, “it depends on what precisely is being done at the facility”....
Independent Contractor or Employee?
I have a growing business, do I want to hire new employees or use independent contractors? ...
We hear this question all the time. Small business owners can often save money by using independent contractors instead of hiring full time employees. By using independent contractors, the business does not have to withhold taxes, pay Social Security, Medicare, Worker's Compensation premiums, or benefits such as health insurance and vacation. However, such short term savings will invariably not hold up to IRS scrutiny if it is deemed that the contractor should have been classified as an employee. So, what is the definition of an independent contractor? In a nutshell, an independent contractor works for themself, not for you. You are their client, not their employer. You can't control their hours, nor control how they perform their work. Contractors work for multiple companies, not just one company. Contractors usually do not work set hours. Contractors typically use their own equipment, tools and technology. Contractors are typically compensated on a job or project basis, not on an hourly basis....
I was just informed by the adjustor that we did not carry enough insurance on the building which suffered a loss, and have a co-insurance penalty? What does that mean?...
Simply put, it means that the building was not adequately insured based on the replacement cost of the building. Let's say your insurance contract states that the co-insurance penalty is 80%....
We get asked this question quite frequently, or the variant, which is "Why does this policy cost more than the other one?"
We get asked this question quite frequently, or the variant, which is "Why does this policy cost more than the other one?"...
Tags: insurance policies