Employment Practices Liability at Technology Companies
Does My Company Need Employment Practices Insurance?
According to a recent study by Business Wire, more than 65 percent of small business owners expressed concern that their workers would file an employment-related charge against them. However, studies also reveal that a mere 1.2 percent of businesses have Employment Practices Liability (EPL) coverage.
High Price Tag
Employment-related claims can be extremely costly, especially in cases that drag on for years. With a slow economy and increasing adoption of worker-friendly laws, these cases are on the rise – in fact, discrimination claims are reaching their peak, with more than $376 million awarded to employees in 2009. Many small businesses cannot afford to pay these costs and keep their company afloat.
What Puts Small Businesses at Risk?
Understandably, it can be much more difficult for small businesses to defend themselves against employment-related claims because they tend to have fewer resources and a different work environment. Small businesses are particularly at risk for employment-related claims for the following reasons:
- Many have a minimal staff and lack of in-house counsel and/or full human resources department to rely on.
- Overall lack of extensive recordkeeping on employee performance.
- More intimate working environments may cause personal riffs during layoffs.
An Affordable Solution
Fortunately, with employment-based lawsuits on the rise and the economy’s sluggish upward climb, EPL coverage is becoming more affordable. More companies are beginning to offer EPL insurance policies with comprehensive coverage to smaller businesses to protect them in tough times. In fact, EPL insurance is becoming so important to the success of small businesses that it is being offered at more affordable prices and being tailored specifically for those smaller companies. With employment charges costing upwards of $40,000, EPL coverage may be a smart choice for you.
This Coverage Insights is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.