Employment practices lawsuits can be extremely expensive and damaging to any business or entity. In 2017, the Equal Employment Opportunity Commission (EEOC) obtained nearly $400M for victims of workplace discrimination in over 84,000 cases.
What are the statistics on Employment Practices Liability?
- Claims for discrimination and harassment can come from employees, potential employees, and customers.
- The top 10 claims categories relate to (rounded up):
- retaliation (49%)
- race (34%)
- disability (32%)
- sex/gender (30%)
- age (22%)
- national origin (10%)
- religion (4%)
- color (4%)
- Equal Pay Act (1%)
- Genetic Information Non-Discrimination Act (0.2%)
- The average amount for an out of court settlement is $75,000. The average amount awarded to a successful claimant is $217,000. Neither of these figures includes defense costs, which can easily exceed the settlement amount.
- The top 10 states with the most claims in 2017 were:
- Texas
- Florida
- California
- Georgia
- Pennsylvania
- Illinois
- North Carolina
- New York
- Virginia
- Tennessee
How can your company reduce the risk of Employment Practice Liability claims?
Preventing employment discrimination means understanding what is expected as an employer and providing employees with resources to enable them to work in a professional environment.
- Make sure your employee handbook is thorough in detailing your company’s workplace policies. Working with an employment attorney will help ensure all policies and statements are current and accurate with the laws. Have each employee confirm in writing that they have read and understood the handbook.
- Create job descriptions for each position that clearly defines expectations, skills, and performance.
- Screen potential hires to vet out unsuitable candidates before calling them.
- Conduct background checks and drug testing.
- Institute a zero tolerance policy regarding discrimination, substance abuse, all forms of harassment, and bullying.
- Understand current employment laws enforced by the U.S. Equal Employment Opportunity Commission.
- Get an Employment Practices Liability policy:
- Coverage provides protection to employers from lawsuits brought on by employees, potential employees, and customers.
- Almost all EPL policies pay on behalf of the client (you) and have a duty to defend.
- Optional coverage is available to extend to third parties.
- Some carriers will agree to add Choice of Counsel, but the firm must be disclosed at the time of underwriting.
- Coverage generally applies worldwide.
- Can be added as an endorsement on a Business Owners Policy or a General Liability policy.