More on Employment Practices Liability

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Employment Practices Liability Insurance (EPLI)

Employment Practices Liability Insurance has long been considered a line of coverage that only large corporations and certain industries require. But changes in labor-related regulations, such as the Americans with Disabilities Act (ADA), and the dramatic increase in job discrimination lawsuits have increased the popularity of this once unusual form of coverage.

Facts:

1. During the last twenty years, the number of discrimination lawsuits has increased more than 2000%.

2. In 1996, 23000 lawsuits were filed in federal courts by workers alleging race, sex, disability or age discrimination.

3. The most common type of employee-related lawsuits are for wrongful termination, sexual harassment, and sex, age, race, and pregnancy discrimination.

4. In a 1995 survey of 195 small companies, 46.1% had been sued by an employee. Legal and settlement costs averaged over $40,000. Of those that had been sued 33% were charged with wrongful termination.

5. The average wrongful termination jury award based on disability discrimination is over $300,000.

6. The average wrongful termination jury award based on age discrimination is over $500,000.

7. The average wrongful termination jury award based on race discrimination is over $700,000.

8. Liabilities presented by many labor-related regulations are not covered by typical comprehensive general liability insurance.

Recent Employee Related Damage Awards

1. A California law firm was recently ordered to pay more than $7,000,000 in punitive damages to a secretary who was sexually harassed by her boss, a partner in the firm. The jury found that the firm had not taken appropriate steps to eliminate the harassment.

2. A 28 year old office worker was awarded $850,000 in damages by a jury that found that her employer wrongfully terminated her for becoming pregnant on her honeymoon.

3. A Maine jury ordered a manufacturing company to pay $720,000 to a former worker who claimed she was fired in 1994 in violation of the American with Disabilities Act. The worker contended that she was disabled by carpal tunnel syndrome. They jury agreed that this disability was the major factor in her dismissal.

4. A major oil company recently agreed to settle a $175 million class action race bias suit. Audiotapes made available revealed that three company executives conducted a conversation in which minorities were ridiculed.

The Benefits of Employment Practices Liability Insurance

Premiums have never been lower. In the last year, premiums have come down 20% to 30%. Companies with 10 employees can find good coverage at competitive prices.

Coverage has never been better. Check out ARM's EPLI Coverage.

Most EPLI insurers provide legal defense of covered claims, toll-free numbers for employers, and newsletters.