Employers are typically well-versed in how to stay compliant with the rules and regulations surrounding employment.
We all know not to discriminate and not to tolerate harassment. We know to have the appropriate rationale and documentation when making a termination decision. We know not to retaliate against an employee who has exercised his or her rights in terms of Family and Medical Leave Act (FMLA) leave, workers’ compensation, whistleblowing, etc.
But what if you get sued anyway? What if, despite doing seemingly everything by the books, a lawsuit still gets filed? Despite the best of intentions, lawsuits still get filed against employers for things like wrongful termination, harassment, age discrimination, gender discrimination, race discrimination, breach of contract, or retaliation.
Employers often think there’s no way that will happen to them, but it can happen anywhere and catch you off guard. It can happen even if the organization sincerely didn’t breach any laws—a claim could still be filed, and the organization will need to defend itself to prove it had the proper practices.
What Can Employers Do to Mitigate the Risk?
While there are a whole host of actions an organization needs to take after a lawsuit gets filed, did you know there’s also a form of insurance that can help the employer offset the costs of such a claim?
The insurance is called employment practices liability insurance (EPL or EPLI). For organizations with this type of insurance, should a claim be filed, the insurance kicks in and covers the costs of defending the organization, as well as the damages, should any be awarded, up to whatever the policy maximum allows.
Should a claim happen, the time and money to mount a defense can really add up. There are the obvious costs, like attorneys’ fees and court costs, and there are also all of the miscellaneous costs that quickly add up, like the costs involved in finding all of the documentation required for the defense and the time it takes to handle these tasks and conduct the investigation.
Source: HR Daily Advisor