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Overview of the employment practices liability insurance

Businesses can obtain employment practices liability insurance to protect themselves against claims that their employees have been breached their legal rights. Among other things, the business is protected from lawsuits filed by its employees for sexual harassment, wrongful infliction of emotional distress, failure to hire or promote wrongful termination, negligent evaluation, wrongful discipline, denial of career opportunities, unfair hiring practice, etc.

Summary of employment practices liability insurance

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Employers’ liability insurance cost varies based on the size and type of your company, the number of employees, risk factors involved, history of the company being sued over employment practices, etc. As a result of the policy, the company will be compensated for the costs incurred in defending a lawsuit in court, the judgment, and settlement, etc. Legal expenses are typically covered regardless of whether the company wins or loses the lawsuit. In addition to the employer entity, the policy also covers its directors, shareholders, officers, etc. Whenever possible, employers should make sure that all employees, including part-timers, seasonal employees, leased workers, and independent contractors, are covered.

The current trend of employees suing their employers has resulted in corporate countering by drafting policies that forbid discrimination and harassment, training personnel to enforce the policies, and making sure that complaints are heard and action is taken. As employment disputes account for over 30 percent of all civil litigation, this is a serious issue. As a result of the current federal and state employment laws, employees are seeking greater rights of recovery than ever before.

As a result, the employer will benefit from a fair and progressive employment practices per-claim policy, as if there is a class-action lawsuit, the business will have to pay just one deductible. If the business can obtain a deductible cap for the employment practices liability insurance policy, that will benefit the company.