5 Tips to Prevent Employment Practices Claims

5 Tips to Prevent Employment Practices Claims

Employers are seeing a significant increase in the number of employment practices claims, with 99,412 charges filed with the U.S. Equal Employment Opportunity Commission in 2012. Employment practices liability (EPL) lawsuits can be costly, with total costs averaging at $70,267, according to Chubb. So why aren’t companies insuring the risk?

In a recent survey conducted by Chubb, 60% of companies believe that their general liability policy will cover an EPL-related event. However, most standard business policies specifically exclude these types of claims. Employment practices liability insurance (EPLI) is a type of liability coverage that protects employers from wrongful acts that arise during the employment process.

Employers should implement these 5 best practices to help control the frequency and severity of EPL claims, and ultimately to avoid a formal-written claim or lawsuit in the first place:

  1. Develop and implement concise, written employment policies and procedures (i.e. Employment Handbook).
  2. Provide educational training sessions on sexual harassment, employee-awareness, and diversity management.
  3. Specific policies and procedures to avoid wrongful discharge suits.
  4. Settlement agreements and claim releases.
  5. Alternative dispute resolutions through arbitration and mediation.

For more information on employment practices liability insurance, contact McGrath Insurance Group at 800-342-3859 or www.mcgrathinsurance.com.

*This article is for informational purposes only and should not be construed as providing legal advice.

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