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Employment Practices Liability
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Employment Practices Liability: What's My Exposure?

For business owners, the workplace is a minefield. Many employers feel that almost any encounter with employees could be construed as racial discrimination, sexual harassment, or age bias. In fact, a survey of small business owners found that 92 percent believe they will face an employment claim – no matter how carefully they manage their employees. "Even with precautions it can happen," said one owner. "It happened to me."

The numbers support this statement. In the five year period from 2007 to 2011, the number of charges filed with the EEOC increased by 21 percent, with a record 99,947 claims filed in 2011 alone. Half of these claims targeted smaller businesses.

Even though 75 percent of claims are found to be groundless, defense costs are high. In 2011, a record high $364,700,000 was paid in claims settlements. Eighty-one percent of Employment Practices Liability claims settle for between $22,000 and $40,000 on average, a significant amount for a small business. Click here to see the most recent statistics, legislation, and information about EPL claims.

Employment claims can be distracting and emotional for business owners. They may feel betrayed by employees they've known and trusted. It can take more than a year to resolve and many businesses suffer while owners fight a claim.

What concerns owners? A recent survey found discrimination claims based on race, age, gender, or other factors are what they fear most, followed by sexual harassment and wrongful termination. The results mirror official reports.

Small business owners agreed to share their experiences. Here's what some had to say:

Employment Practices Liability coverage is a simple and affordable solution specially designed for businesses to provide protection against employee claims. Contact your independent insurance agent to find out more about Employment Practices Liability coverage.

The Employment Practices Liability coverage described here is in the most general terms and is subject to the actual policy exclusions and conditions. For specific coverage details and policy exclusions, refer to the policy itself or contact a Central Agent.

Statistics courtesy of Hartford Steam Boiler.

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