I’m working on an insurance policy renewal for a Technology, Computer & IT Services based small business. This is for their Professional Liability / Errors & Omissions insurance coverage.
The insured wants to know the advantages of keeping this E&O insurance policy and the coverage differences compared to General Liability insurance.
Here’s a nice two-minute explanation from The Hartford to address this exact question:
If you ask me, all Technology, Computer and/or IT Services based businesses should carry both professional liability (E&O) and General Liability to protect their risk exposures, without question.
Your clients can sue you for a wrongful act in providing professional services, which can be the result of an act, error or omission; very often, it is not the result of a mistake, but rather displeasure with the outcome, and even frivolous lawsuits will incur defense costs
The best part is that both coverages can often be packaged into a single policy together.
Yesterday, the Small Business Administration (SBA) Office of Advocacy published a fact sheet by research economist Daniel Wilmoth that indicates more small businesses are opening than closing. In 2017, the number of businesses in the U.S. increased by about 118,000 with various levels of growth depending on the region. In all, 975,000 new businesses had opened by the end of 2017. The number of businesses that closed fell from 859,000 in 2016 to 857,000 in 2017. Business openings have exceeded business closings for 28 consecutive quarters, Wilmoth noted. California accounts for nearly one-third of the net increase of businesses in 2017, with 38,000.
Source: Long Beach Business Journal
Summer is in full effect and it’s been hot and muggy in So Cal. Another heat wave is on the horizon this week. We spend our summer weekends at the pool and the beach and when it’s 90+ degrees outside, the last thing we want to do is slip into our wool suits or heavy dress clothing when we go to work. As an employer, how do you treat the dress code standards at your workplace? Do you have a dress code?
Click here to read the California Chamber of Commerce Human Resources Department’s thoughts on the subject that employers should consider – especially during these hot summer days.
Quite honestly, I am floored by how many small businesses do not purchase Employment Practices Liability Insurance (EPLI). For those who are unaware, Employment Practices Liability is coverage against claims by employees alleging that they suffered damages as a result of the employer’s discrimination, wrongful termination, sexual harassment, or various other employment-related offenses.
When saying I am floored by how many small businesses do not purchase EPLI, I am basing that off my own experience in helping businesses with their various risk exposures and insurance needs.
I understand there’s a price tag associated with the coverage, but there’s a reason why premiums can be hefty in California for EPLI. Statistics show businesses are more likely to face an employment claim than a property or general liability claim.
Check out these statistics:
- The average amount paid for out of court settlement is $40,000.
- Defense of an average EPL case, through trial, costs over $45,000.
- The median compensatory award for EPLI cases is $218,000.
- 67% of all employment cases that litigate result in judgment for the plaintiff.
- 41% of all EPLI claims are brought against small employers with 15 to 100 employees.
- Six out of ten employers have faced employee lawsuits within the last five years.
- 91,503 charges were filed in 2016, slightly higher than the past two years.
Most importantly, buying an EPLI policy provides defense coverage in the event of a claim or suit regardless of the legitimacy of the claim. A simple allegation cannot be ignored. When you receive that summons in the mail, you cannot just throw it away. It must be addressed and defended. EPLI provides defense coverage to protect your business.
Also, when buying EPLI, you have 24/7 access to Human Resource professionals and Employment Law attorneys to consult with if you need guidance on how to address an employment issue. Carriers don’t want to pay claims, so this offering is pushed on their part to help mitigate the potential of a more serious matter.
In my opinion, Employment Practices Liability Insurance is a must for any business with employees in California. The annual premium cost will seem like pennies on the dollar compared to the cost of a claim. Don’t believe me? Take a second look at the statistics above. You should act today before it’s too late. You can’t buy a policy for an Employment Practices claim or incident that already happened.
In honor of National Small Business Week, the United States Small Business Administration and the SCORE Association are hosting a three-day virtual conference on topics such as consumer behavior, discrimination, and harassment, gaining repeat business, marketing and more. The free conference for small businesses is from 9:30 a.m. to 3 p.m. each day from May 1 to May 3. Click here to register.
The webinars include the following topics:
- How Changing Consumer Behavior Impacts Your Business
- Addressing Discrimination and Harassment in the Workplace
- Get New and Repeat Business On Autopilot with Email Marketing
- Creating and Sustaining a Strong Social Presence
- The U.S. Economic Outlook and Its Impact on Small Businesses
- Managing Your Finances in the Cloud
- Grow Your Business in 2018
- Simple Steps to Choosing the Right Financing
- Simple Steps to Choosing the Right Financing
- Sharing Your Story Through Video
- Pop & Play: How Opening a Pop-Up Shop Can Help Launch Your Retail Brand
- Fusion Marketing: The Next Generation of Marketing
Roughly 14 million Americans are expected to call in sick on Monday — making the day after the 52nd Super Bowl Sunday one of the biggest sick days of the year, according to a survey by the Workforce Institute at Kronos and Mucinex. Post-Super Bowl Monday is “notoriously known as a day where people call out of work,” with 1 in 5 Americans saying they’ve called in sick over the years. This year is expected to be down from the 16.5 million who had said they planned to call in sick last year after Super Bowl Sunday.
The U.S. Equal Employment Opportunity Commission (EEOC) announced last week that 84,254 workplace discrimination charges were filed with the federal agency nationwide during 2017.
The agency handled over 540,000 calls and more than 155,000 inquiries in field offices.
The FY 2017 data show that retaliation was the most frequently filed charge filed with the agency, followed by race and disability. The agency also received 6,696 sexual harassment charges and obtained $46.3 million in monetary benefits for victims of sexual harassment.
Specifically, the charge numbers show the following breakdowns by bases alleged, in descending order:
- Retaliation: 41,097 (48.8 percent of all charges filed)
- Race: 28,528 (33.9 percent)
- Disability: 26,838 (31.9 percent)
- Sex: 25,605 (30.4 percent)
- Age: 18,376 (21.8 percent)
- National Origin: 8,299 (9.8 percent)
- Religion: 3,436 (4.1 percent)
- Color: 3,240 (3.8 percent)
- Equal Pay Act: 996 (1.2 percent)
- Genetic Information: 206 (.2 percent)
These percentages add up to more than 100 because some charges allege multiple bases.
EEOC legal staff filed 184 merits lawsuits alleging discrimination in fiscal year 2017. The lawsuits filed by the EEOC included 124 individual suits and 30 suits involving multiple victims or discriminatory policies and 30 systemic discrimination cases. At the end of the fiscal year, the EEOC had 242 cases on its active docket. The EEOC achieved a successful outcome in 90.8 percent of all suit resolutions.
My question to you, do you have Employment Practices Liability Insurance for your business?