The number of lawsuits filed by employees against their employers has risen significantly since the 1990s. Both small and large firms can face legal action. For this reason, it is important for businesses to implement appropriate measures aimed at protecting the organization. Employment Practices Liability Insurance (EPLI) provides a surefire way to achieve this objective.
The insurance provides coverage for a variety of claims, including sexual harassment, wrongful termination, discrimination and more. It reimburses legal costs incurred while defending a case in a court of law. The same applies to judgments and settlements associated with sexual harassment claims.
Your company can take advantage of the reimbursements whether you win or lose the legal battle. However, the coverage does not extend to criminal or civil fines and punitive damages.
EPLI provides specific coverage and you should decide on the distribution. You can implement coverage based on roles, departments and employment status. You may decide to include full-time employees, supervisors, company divisions, department heads and exclude part-time employees. The final decision can have a direct impact on how your organization deals with sexual harassment lawsuits.
According to EPLI rules, businesses should report any sexual harassment incidents as soon as possible. However, your company can also take a policy that comes with an extended reporting period (ERP) or prior acts clause. Each insurance provider charges differently. The same applies to length and availability.
Fortunately, applicable charges have been decreasing in the past few years following long periods of sustained increases. It is important to note that costs associated with this type of insurance are determined by a variety of factors. These include type and size of business, past lawsuits, and distribution of coverage.
What constitutes sexual harassment?
Sexual harassment comes in various forms and businesses should stay well informed about inappropriate actions. Both federal and state law prohibits people in superior roles from exploiting their authority over subordinates to seek sexual favors. The unacceptable behavior sees subordinates being victimized for resisting sexual advances. In these cases, superiors may alter work expectations and withhold salary or promotions unless a subordinate yields to demands. Some bosses unfairly subject employees to disciplinary action, including termination of employment as punishment for refusing to exchange sexual acts. This may apply to an employee that decides to stop an existing romantic relationship. Offenders can be any employee, including coworkers of the same rank, external suppliers or customers.
Ways to Prevent Sexual Harassment Lawsuits
Some of the key prevention steps include:
For more information about how you can protect your company from a sexual harassment lawsuit, contact the professionals at The Marcus Group at (954) 721-1180.