The past decade has witnessed an alarming surge in the number of employment related lawsuits lodged against American businesses. The numbers are shocking, and employers may rightfully feel they are under attack.

In the past year, the Equal Employment Opportunity Commission received a shocking 50,000 charges of alleged sexual and raced-based discrimination, comprising 72% of the agency’s private sector caseload. Almost three-quarters of all lawsuits brought against companies today involve employment disputes.

• The EEOC reported it received a record-high 95,402 private sector discrimination charges in 2008, up over 15 percent from the previous 2007.
• The numbers in its annual report indicate it had a pending case inventory of 73,951 charges as of September 30, 2008, compared with a backlog of 54,970 charges a year earlier, equal to a 34% increase.
• The EEOC resolved 81,081 charges in 2008 and obtained about $274.4 million in remedies for charging parties, down slightly from $290.6 million recovered in fiscal 2007.

Employer Must Protect Themselves!

Despite an employer’s best intentions, employees can file a claim at any place, at anytime, for virtually anything. Solid HR policies and practices are a must, but even with every “T” crossed and “i” dotted, employees can still sue. Therefor, it is critical that employers protect themselves by purchasing Employment Practices Liability Insurance (EPLI).

What is EPLI and How Does It Work?

Employment Practices Liability Insurance (EPLI) is a critical insurance to protect employers. While companies have long recognized the value of General Liability or Errors and Omissions insurance, many are now beginning to consider the importance of EPLI.

EPLI is a comprehensive insurance policy that protects employers  against a wide range of employment activities. This coverage is specifically designed to cover claims and lawsuits brought by employees alleging wrongful termination, discrimination, unlawful harassment, including:

• Discrimination
• Sexual and non-sexual harassment
• Assault and battery part of sexual harassment
• Wrongful employment decision or act
• Wrongful termination – actual and constructive

EPLI Premiums

EPLI rates vary, based on many risk factors. First and foremost, insurers review the Employee Handbook and corporate employment policies. Additionally, they consider the number of employees, the turnover ratio, and prior employment lawsuits against the company. Small employers with solid Human Resource practices and clean history can often procure coverage for approximately $80 – $120 per employee, per year. Larger employers, or companies with prior lawsuits or weak HR practices can expect to pay substantially more.

Employers can lower their company’s exposure to lawsuits by implementing certain basic, common-sense precautions:

• Institute zero-tolerance policies toward workplace harassment, discrimination, and alcohol and drug abuse.

• Develop a comprehensive Employee Handbook which reviews and clearly defines accepted corporate policies and practices.

• Regular Performance Appraisals.

• Complete employee files and employee documentation.

EPLI Solutions

If you currently offer EPL Insurance and are looking to compare rates, or are in the market to purchase this critical insurance. please let us know. CPEhr offers comprehensive coverage through Lloyds of London, rated A++ by Best’s & AAA by Standard & Poors, and is able to assist in the implementation and management of compliant HR policies that will satisfy all insurers’ requirements.