Employers of all sizes are exposed to legal actions filed by current or former employees that allege discrimination, harassment, wrongful termination, and other charges. Employment Practices Liability Insurance (EPLI) covers lawsuits brought by employees (past, present or prospects), or governmental entities against the insured employer, alleging wrongful discharge, discrimination or certain types of harassment.   EPL coverage is excluded under most General Liability policies but can be written on a stand-alone policy.

Claims can arise from employees being offended by cartoons, jokes, suggestive comments from supervisors and/or co-workers (sexual harassment); termination of an older employee or failure to promote an older employee (age discrimination); overbearing supervisors (hostile work environment); different rules for men and women in the same positions (sex discrimination); etc.  As you can imagine, the potential for Employment Practices Liability claims are almost endless and usually very expensive.

I recently read about an EPL claim where the administrative assistant in an attorney’s office (I’ll call her Sue) was terminated after 15 years of employment.  Sue’s supervisor (I’ll call her Helen) was much younger than Sue and was constantly criticizing Sue’s work and attitude.  Sue had never received any negative reviews prior to Helen.  After Helen conducted Sue’s annual review (which was negative and alleged poor work performance and attitude problems) Sue was terminated.  Sue then filed a lawsuit against her employer for age discrimination (Sue is in her late 50′s) and hostile work environment (harassment by Helen), won her lawsuit and was awarded a settlement of over $1,000,000 plus court costs.

Many cases have involved female employees suing their employers for sex discrimination when a male co-worker (with the same or less  credentials as the females) was promoted over them.  Some of these claims have involved large, well known companies such as Wal-Mart and Publix Supermarket.

We also see quite a few claims for sexual harassment.  The days of posting or passing around cartoons and jokes or commenting on a co-workers appearance and/or clothing and not getting into trouble are a thing of the past.  It’s often difficult to draw the line between innocent fun and malicious abuse.

With today’s “I’ll sue you”, it’s not my fault”, politically correct mind set these claims are becoming more and more frequent. 

I strongly urge every employer to sit down with their insurance agent and discuss this very valuable, but often overlooked, insurance protection!