|
Employer-related liabilities
By Josh Ring
EL DORADO INSURANCE
By now, the benefits to a comprehensive general liability policy are widely known. Broad liability coverage written to your specific industry affords protection for almost any set of circumstances that a private security firm could encounter with regards to bodily injury or property damage. However, what affords a corporation, its directors, officers, and employees coverage for discrimination? In an industry where high employee turnover is normal, how can a company protect themselves from wrongful termination lawsuits?
Since 2000, the number of employees alleging claims such as wrongful termination, discrimination, sexual harassment and retaliation has increased exponentially. Employees� willingness to sue has been further compounded by the fact that settlements and judgments in these suits average a six-figure dollar amount.
These employment practices claims, which range in scope and size, have been further compounded by a few additional factors:
-
Plaintiff attorney�s eagerness to sue employers for employment-related issues.
-
Recent changes to workplace laws have expanded employees� rights, opening new and creative ways to bring �causes of action� against their employer.
-
Third-party claims brought by customers and consumers asserting discrimination or harassment.
It is for these reasons and more that a private security firm should consider protecting themselves with an Employment Practices Liability Insurance policy. In today�s litigious environment, merely complying with employment laws, committing resources to employee training and documenting will not eliminate financial consequences. Even in instances where the employer has done nothing wrong, the cost to defend themselves from such claims can routinely exceed $100,000.
EPLI policies can vary from carrier to carrier and there are a number of factors that should be discussed with your insurance broker prior to making a decision on such coverage. Specifically with regards to the security industry, some exposures are more prevalent and it is essential that they be covered by the policy. For one, many policies exclude independent contractors, part-time, temporary or seasonal employees. Since it is a very common practice in the security profession to hire such employees, policies should be examined to ensure that these individuals are included. Additionally, the overwhelming majority of security officers spend their day largely unsupervised. Their time may be spent interacting with your client�s employees or the �general public.� As noted earlier, third-party claims against a corporation are on the rise, and their inclusion on your policy is vital. Since EPLI policies are traditionally not written with third-party coverage, open dialogue with your insurance professional is key.
In conclusion, an EPLI policy can protect a security company (and its owners) from claims of discrimination, sexual harassment, wrongful termination and breach of employment contracts. Though many of these claims may prove to be frivolous, the cost to defend and the time required defending such a claim makes this something every company owner should consider in order to protect themselves and their livelihood.
To contact Josh Ring, call El Dorado Insurance at (800) 221-3386 or visit
www.eldoradoinsurance.com.
|
