Insurance Tracking Software: Employee Practices Liability Policy
This past month the media has been consumed with stories regarding bullying, whether it is children cyberbullying or professional athletes hazing. This form of harassment can cause serious emotional damage to the victims and lead to tremendous financial lawsuits. This is a great time to think about your company’s risk management plan when it comes to harassment or discrimination found within the work environment. Besides the procedural harassment training classes, there are steps a construction company can make to help protect their finances.
Construction companies face a difficult and unique situation when it comes to monitoring harassment and discrimination. Seasonal temporary workers and the lack of centralized control on job sites can cause an increase in exposure to harassment/discrimination. Furthermore, the recent anti-bullying campaigns and media exposure will increase the amount of cases brought forth for a lawsuit. According to the Bureau of Labor Statistics, the construction industry is around 91% Men and 9% Women. However, men file 19.26% of the sexual harassment cases in the United States. (1) With increased awareness of bullying, more and more companies are facing lawsuits against them. The average harassment and dissemination lawsuit averages around $250,000, and the top 15% are over $1 million. (2) In the midst of this situation, it is important to start thinking of procedures to help protect your company
Liability insurance is available to construction companies to help protect against lawsuits filed in regards to harassment and discrimination. Prior to 1989, General Liability policies (GL) covered most employee practice claims. (2) During the 80s, insurance companies saw a dramatic increase in sexual harassment lawsuits and cases being awarded on behalf of the defendants. In response, the insurance companies excluded all Employee Practice Claims from GL. However, a separate standalone policy was created that would cover all Employee Practice Exposures called Employee Practices Liability Policy (EPL). Not only does EPL protect companies against harassment lawsuits, but it also protects companies from many other employee workplace torts such as: invasion of privacy, wrongful termination, negligent training, negligent retention and much more.
If you are thinking of purchasing an EPL policy or if you are currently covered, it is important to make sure you track and keep your policy current. EPLs are filed under a claims-made coverage only, which means that you have to have an active policy when an employee files a lawsuit. For example, let’s say an employee was harassed in 2012, and during that time, you had EPL coverage. But if the employee didn’t file a lawsuit until 2013 and you no longer had EPL insurance, you would not be covered. It is vital that you don’t have any gaps in coverage as it could cost your company hundreds of thousands of dollars. Insurance tracking software is available to help you track and notify personnel of policy expiration dates. In addition, take the time to review your harassment procedures and make sure you are practicing effective risk management skills.
What are some of the procedures your company is doing to help stay protected?