Employment related risks may be some of the most costly for California businesses. Most EPLI claims are centered on sexual harassment and wrongful termination. Firms with less than 50 employees are prone to have more exposure due to lack of human resources expertise.
According to EEOC enforcement and litigation statistics, the number of filings alleging employment discrimination (including race, age, disability, religion and national origin) totaled 88,656 in 2012, the greatest number of charges received by the federal agency since 2002 and the largest annual increase (9 percent) since the early 1990s.
Employment claims can be distracting and emotional for business owners. Owners may feel betrayed by employees they've known and trusted. Claims can take more than a year to resolve and many businesses suffer while owners fight a claim.
Here are quotes form business owners about EPLI claims:
“I had no idea that it would cost $50,000 to defend myself, and I was in the right” -- John, owner of a tech firm
"It was the hassle factor that was so distracting. The entire ordeal caused a lot of sleepless nights." -- Owner of a bottling plant
According to the Insurance Journal, “Employment practices in California is a known and growing concern for insurers, agents and employers, and that concern has some carriers ramping up rates dramatically or quietly pulling back from the area. Say those familiar with the region’s market.”
Employment Practices Liability Insurance (EPLI) is designed to help employers respond to growing EPL exposures, such as:
- Wrongful Termination
- Equal Employment Opportunity Commission (EEOC) and other government authorities
- Breach of employment contract
- Wage and hour claims
- Invasion of Privacy
- Compensation Issues
- Employee Benefits Administration
- Reduce the cost of litigation
- Protect the company’s assets
- Indemnify and protect company officers