The Importance of EPLI Coverage
Posted: March 9, 2011 Filed under: Hospitality | Tags: EEOC, EPLI, hospitality, hospitality insurance, nc insurance, north carolina insurance, sia group, workers comp, workers compensation Leave a comment »
The number of retaliatory claims made by dismissed workers has skyrocketed 55 percent since 2000. This figure has jumped 7 percent this past year alone, with an all-time high of 100,000 new claims against former employers. While workers’ compensation and general liability insurance cover most incidents in the workplace, these retaliatory claims are not.
This situation catches many employers off guard and can cause an almost insurmountable financial burden for a business. Employment Practices Liability Insurance (EPLI) protects your business beyond the coverage that workers’ compensation and general liability provide.
Why is This Happening?
Industry experts have been able to pinpoint a couple of reasons that this surge might be taking place. Some say that the economy is to blame, and dismissed workers who know they might not be able to find work for a while are looking to get as much from their former employer as possible.
The second possible reason is that in 2008 the U.S. Equal Employment Opportunity Commission (EEOC) was given expanded authorities under the ADA Amendments Act, Genetic Information Nondiscrimination Act and the 2009 Lilly Ledbetter Fair Pay Act. These new authorities, coupled with increased accessibility to the EEOC, allow for easier filing from employees who feel they have been wrongfully terminated.
Why Do You Need EPLI?
Take this story as an example. A waitress at a restaurant was dismissed for poor performance, all of which was properly documented over the period of a few months. This employee was also pregnant, and she felt that her termination was not due to her poor performance but her condition. The restaurant, which did not have EPLI coverage, spent $100,000 for defense costs in court alone.
Verdicts for plaintiffs in these types of cases can reach upward of $1 million. EPLI coverage can cover your defense costs and help to defer the cost of the award, should the court side with the defendant in a wrongful termination suit.
No insurance can guarantee that an employee who is let go will not turn around and accuse your business of wrongful termination. However, you can prevent their suit from causing your business immense financial damage in order to defend yourself in court. Call your insurance agent today to make sure you have adequate protection.
Image: Joelk75
