How to Reduce Employment Practices Liability Claims
Across all industries, businesses are seeing an increase in Employment Practices Liability claims. With an average cost of $50,000, one EPL claim can easily put a small business out of business.
Employment Practices Liability claims include lawsuits from employees for claims relating to their employment, such as discrimination, retaliation, and harassment. These coverages are not covered by either Workers Compensation or General Liability policies.
EPLI, Employment Practices Liability Insurance is a vital coverage for any business with employees because it will provide coverage for these expensive claims. EPLI policies also come with policyholder services including free HR help, forms, and a legal helpline to answer questions.
While we recommend that every business owner has EPLI coverage, either on a stand-alone policy or as part of their Package, some steps can be taken to reduce the incidence of Employment Practices Liability claims are outlined below.
One of the best ways to reduce Employment Practices claims is to have a comprehensive Employee Handbook that clearly defines your practices and policies. Make sure that the handbook is updated every year to include any changing laws. Things that your handbook should include are:
· State your equal employment policy
· State a clear policy against sexual harassment
· State a code of ethics and code of conduct policy
· Have an Anti-Retaliation Statement
· List what your disciplinary policies are, and what actions are to be taken
· Include how Employee Complaints can be made and have a defined process for handling and investigating employee complaints.
Other ways to reduce EPL claims are:
· Document all disciplinary actions, including meetings and verbal warnings
· Always follow the set disciplinary policy and action policies, documenting every step of the way per the above
· Keep the employee/employer relationship professional
· Listen to, investigate and take action on every Employee Complaint
· Provide Sexual Harassment Training (required in California for all businesses with five or more employees)
· Ensure workers are classified correctly
· Provide equal pay
· Pay for all overtime worked, or have a policy that restricts overtime, and pay for all time training.
These are the building blocks for reducing your EPL claims, but in addition to these, a policy should still be in force. Having a policy will allow the policy to respond to complaints and lawsuits, instead of being an out-of-pocket expense for the Employer.
At Fixated Financial, we have many options for EPLI policies. We can tailor a policy to have the limits, retention limits, and coverages that you need. In many cases, we can include it as part of the Businessowners Policy or as part of a package. We also have multiple stand-alone markets. All of our carriers include Policy Holder services such as helplines, HR information, and resources and dedicated claims handling for a fast response. We will be happy to provide a full policy review of your current policy as well. Contact laura@fixatedinsurance.com or veronica@fixatedinsurance.com for applications or more information.
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