Tag Archive | Employment Practices Liability Insurance

10 EEOC Tips for Small Businesses

I will preface this by saying that I am not a Human Resources professional nor an attorney. Don’t take this as the end all/ be all when it comes to your employee relations. Although I am not and attorney or certified HR professional, I do help businesses with their risk management and insurance needs and Employment Practices Liability Insurance is one of those areas. Here in Southern California, Employment Practices Liability insurance claims happen a LOT more than general liability, professional liability (E&O) or any other areas of liability for that matter. I don’t have the statistical data, but working day-in and day-out with clients, I do see Employment Practices Liability claims a whole hell of a lot more than most other lines of insurance. And remember, Employment Practices Liability claims are NOT covered by a General Liability insurance policy or Workers’ Compensation.

With that being said, here are 10 EEOC (Equal Employment Opportunity Commission) Tips for Small Businesses taken directly from the EEOC. The Equal Employment Opportunity Commission is an independent federal agency created by Congress in 1964 to eradicate discrimination in employment. The Commission enforces various statutes that prohibit employment discrimination on the basis of race, color, sex, national origin, religion, retaliation, age, and disability or protected veteran status.

The EEOC has the authority to investigate charges of discrimination filed against employers who have a statutory minimum number of employees. HR can help avoid costly penalties by following the tips published by the EEOC.

  1. Look at the facts, not the faces. Race, color, religion, sex (including pregnancy, sexual orientation or gender identity), national origin, disability, age (40 or older) or genetic information (including family medical history) should not be a factor when you hire, fire, promote, pay, train, discipline or make other work-related decisions.
  2. Provide reasonable accommodations to applicants or employees who need them for medical or religious reasons, if required by law*.
  3. Develop a strong anti-discrimination policy before discrimination becomes a problem.
  4. Ensure that employees understand their rights and responsibilities at work.
  5. Be alert to potential harassment or discrimination. Stop, address and prevent harassment and discrimination.
  6. Ensure that employees are not punished for reporting discrimination, participating in a discrimination investigation or lawsuit, or opposing discrimination.
  7. Post an EEO poster at your business.
  8. Keep employment records as required by law.
  9. File an EEO-1 Report if you have 100 or more employees. Some federal contractors with at least 50 employees must also file this report.
  10. Contact the EEOC to request assistance, information or training.
* Federal, state and local laws may prohibit additional types of discrimination and/or require you to provide reasonable accommodations for other reasons. Federal, state and local government websites may have additional information about these laws.


Top 10 Workplace Discrimination Claims in 2015

Retaliation charges increased by nearly 5% in 2015 and continue to be the leading concern raised by workers across the country. Disability charges increased by 6% from last year and are the third largest category of charges filed.

The U.S. Equal Employment Opportunity Commission (EEOC) released breakdowns of the 89,385 charges of workplace discrimination that the agency received in fiscal year 2015.

EEOC said it resolved 92,641 charges in fiscal year 2015, and secured more than $525 million for victims of discrimination in private sector and state and local government workplaces through voluntary resolutions and litigation.

The year-end data shows that retaliation again was the most frequently filed charge of discrimination, with 39,757 charges, making up 45 percent of all private sector charges filed with EEOC. The fiscal year ran from Oct. 1, 2014, to Sept. 30, 2015. The agency is currently seeking public input on its proposed update of enforcement guidance addressing retaliation and related issues as part of its commitment to inform the public about the EEOC’s interpretation of the law and promote voluntary compliance.

Top 10 Charges
The charge numbers show the following breakdowns by bases alleged:

  • Retaliation: 39,757 (44.5% of all charges filed)
  • Race: 31,027 (34.7%)
  • Disability: 26,968 (30.2%)
  • Sex: 26,396 (29.5%)
  • Age: 20,144 (22.5%)
  • National Origin: 9,438 (10.6%)
  • Religion: 3,502 (3.9%)
  • Color: 2,833 (3.2%)
  • Equal Pay Act: 973 (1.1%)
  • Genetic Information Non-Discrimination Act: 257 (0.3%)

The percentages add up to more than 100 because some charges allege multiple bases.
Charges raising harassment allegations made up nearly 28,000 charges, or 31%. Employees claimed harassment in charges based on race, age, disability, religion, national origin and sex, including sexual orientation and gender identity.

The agency filed 142 merits lawsuits last year, up from 133 the previous year. The majority of the lawsuits filed alleged violations of Title VII of the Civil Rights Act of 1964, followed by suits under the Americans with Disabilities Act (ADA). This included 100 individual lawsuits and 42 lawsuits involving multiple victims of discriminatory policies. EEOC lawyers resolved 155 lawsuits alleging discrimination.

Once way to help deal with Employment Practices claims is to purchase Employment Practices Liability (EPL) Insurance. EPL Covers wrongful acts arising from the employment process. The most frequent types of claims covered under EPL insurance include wrongful termination, discrimination, sexual harassment and retaliation. In addition, the policies cover claims from a variety of other types of inappropriate workplace conduct, including (but not limited to) defamation, invasion of privacy, failure to promote, deprivation of a career opportunity and negligent evaluation. The policy covers directors and officers, management personnel and employees. These types of claims are not covered under a general liability or workers’ compensation insurance policy.

Sources: EEOC; Insurance Journal


Former Worker Sues Employer Over Leering Customer

A former employee of a Safeway store in Oregon has filed a lawsuit against the grocery store chain saying she was forced to quit because a customer repeatedly stared at her breasts and made vulgar comments.


A former Safeway employee is suing the grocery chain, claiming sexual harassment by a customer. (The Oregonain/2006)

The Oregonian reported that 44-year-old Daphne Lannan says in a lawsuit filed last week in Multnomah County Circuit Court that she asked managers at the Lebanon Safeway to stop the customer but they did not.

According to the lawsuit, Lannan says a male customer began to comment about the size of her breasts, saying he wanted to touch them. Lannan’s attorney says the law allows employees to sue their employers for sexual harassment by non-employees.

The Takeaway: As an employer, you would need to have an Employment Practices Liability (EPL) Insurance policy to defend a claim of this sort. This isn’t covered by a workers’ compensation insurance policy or general liability policy. EPL provides protection for an employer against claims made by employees, former employees, or potential employees. It covers discrimination (age, sex, race, disability, etc.), wrongful termination of employment, sexual harassment, and other employment-related allegations.

Additional Tip: To avoid gaps in coverage, make sure Third-Party coverage is offered and included by the carrier on your policy. This covers you if a customer or a third-party sues you for discrimination, etc., not just employees. For more information visit: Third-Party Employment Practices Liability Insurance or contact me with questions.


For more on the story: OregonLive.com

The Ins and Outs of Small Business Insurance

Being an entrepreneur makes you the boss, but along with getting to choose your own hours, location, and business plan, it also means that you’re responsible for a lot of other things like commercial/business insurance. There’s a lot more to business insurance than getting the lowest business insurance quotes. It means understanding your business’s unique needs and the potential hazards that can threaten its success.

This brief video from the Insurance Information Institute touches on the ins and outs of small business insurance, including coverage for:

Credit: Insurance Information Institute


California Is Riskiest State for Employee Lawsuits

A new study by Hiscox revealed that, on average, a United States-based business with at least 10 employees has a 12.5% chance of having an employment liability charge filed against them. However, California has the most frequent incidences of Employment Practices Liability charges in the country and businesses in the state have a 42% higher chance of being sued by an employee than the national average! Not surprising!


Behind California, #2 is Illinois, #3 – Alabama, #4 – Arizona & Mississippi. and #5 is Georgia.

The Hiscox survey reveals that lower-risk states for Employment Practices Liability charges include Massachusetts, Michigan, Kentucky, Washington and West Virginia.

One way to help mitigate loss from an employee, potential employee, or former employee suing your business for an employment related claim is to purchase an Employment Practices Liability Insurance policy. Workers Compensation Insurance does NOT cover Employment Practices Liability related claims!


Source – PropertyCasualty360

What Does “Third Party” Mean In Employment Practices Liability Insurance?

I’ve touched on Employment Practices Liability Insurance in the past here.

In a nutshell, Employment Practice Liability Insurance provides protection for employers against claims made by employees, former employees, or potential employees for discrimination (age, sex, race, disability, etc.), wrongful termination of employment, sexual harassment, and other employment-related allegations.

Some Employment Practices Liability Insurance (EPLI) policies have “third-party” coverage included.  “Third-party” coverage refers to claims made by non-employees, usually customers, who allege that an employee engaged in wrongful conduct such as sexual harassment or discrimination. Without a specific policy endorsement for third-party claims, EPLI policy forms do not cover this exposure. Without third-party coverage, a gap in coverage results because EPLI policies are written to cover employment related claims by employees or applicants against their respective employers.

Beware that coverage for third-party employment practices liability claims is excluded under commercial general liability (CGL) policies.

Companies that are heavily customer oriented, such as retail stores, restaurants, or auto dealerships, are most exposed to third-party liability claims. On the other hand, companies not involved much in customer interaction such as manufacturers are not nearly as exposed to these kinds of claims.

Third-party liability coverage is generally available by endorsement for additional premium and should be seriously considered by firms which face these exposures.

Our economy is in such a state where liability claims are on the rise. Many, but not all people, are out there are looking for any way they can make an extra buck during these challenging times. This rise in claims doesn’t only apply to Employment Practices Liability insurance, but general liability, workers compensation, and other forms of liability as well. Business owners beware!


Fired ESPN Announcer Strikes Back With Lawsuit

Ron Franklin

Former ESPN announcer Ron Franklin, who was recently fired for allegedly making sexist comments to a sideline reporter before the Chick Fil-A Bowl, is suing ESPN for wrongful termination.

He confirmed the lawsuit on Wednesday but did not comment on the details of the lawsuit.

Franklin allegedly said to the sideline reporter, “Listen to me sweet baby, let me tell you something.” After the reporter told him not to talk to her like that, Franklin responded, “OK, then listen to me a-hole.”

Franklin later apologized in a statement. The longtime college football and basketball announcer worked for ESPN for 25 years.

What’s the moral of the story?

Employment Practices Liability claims such as this are not limited to major corporations such as ESPN. In today’s litigious climate, employers of all sizes are vulnerable. According to U.S. Equal Employment Opportunity Commission (EEOC) data, 41% of all EPL claims are brought against small employers with 15 to 100 employees. This is why any business with employees, or those which begin to hire employees must consider Employment Practices Liability Insurance (EPLI).

Employment Practices Liability insurance insures against claims of wrongful termination, failure to hire, failure to promote, various types of discrimination, as well as sexual harassment.

These insurance policies will reimburse your company against the costs of defending a lawsuit in court. They will also compensate for judgments and settlements. It doesn’t matter whether your company wins or loses the suit. Policies typically do not pay for punitive damages or civil or criminal fines, however.

One more benefit of these policies is that most include risk management services. Employment Practices Liability Insurance policies will typically offer an unlimited phone hotline service, online training, and state and federal compliance assistance from licensed attorneys.

If you are a business owner and are interested in more information on Employment Practices Liability Insurance, you can reach us here and we’ll be sure to follow-up with you:

Thank you,


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