Gilbert Insurance Helps Employers Across Massachusetts, Including North Shore MA & Greater Boston, Secure Financial Protection Against Employee Lawsuits

Image of ta businessowner and his employee looking at a tablet in a café

Simply by opening for business every day, you know that you’re putting your company at risk for a lawsuit. However, the last place you and many other business owners might expect such legal action to originate is with one of your employees.

An employee lawsuit might be particularly hard to imagine if you own a smaller business with a team of people that feel more like family members than colleagues. Unfortunately, the facts point the other way. Nearly half of all employment practices claims, which include allegations of discrimination, wrongful termination, and retaliation, are filed against companies with fewer than 100 employees. In addition, privately owned businesses are more likely to experience an employment practices claim than a general liability or property claim.

Like many other business liabilities, the risk of an employee lawsuit is on the rise and the amounts awarded by juries and the value of settlement resolutions in these cases have increased dramatically. Even if an employee’s lawsuit is found to be without merit, you’re still likely to incur hefty legal costs to defend your company against the worker’s harmful accusations.

For these reasons, Gilbert Insurance wants to make sure all business owners, whether they have one employee or a thousand, consider adding employment practices liability insurance (EPLI) to their business insurance programs.

What does Employment Practices Liability Insurance cover?

Without question, it’s crucial for your company to follow all required employment practices in Massachusetts and implement preventive measures to minimize an employment practices issue from arising in the first place.

But while you might feel your company has followed the law to a T and kept the safety and well-being of your workers in mind, a past or current employee, a prospective job applicant, or even a volunteer might not see it the same way and claim that your company has violated their rights.

For example, if you pass someone over for a job they feel they’re qualified for, lay off an employee who has a certain level of seniority, or move a worker to a different role after they’ve complained about an uncomfortable situation with a colleague or customer, the employee could believe they have been wronged and quickly escalate the matter into a lawsuit.

If you have EPLI coverage, it may provide you with critical financial protection against these types of allegations and many other kinds of employee lawsuits, including claims of:

  • Sexual harassment
  • Discrimination
  • Wrongful termination
  • Breach of employment contract
  • Negligent evaluation
  • Failure to employ or promote
  • Wrongful discipline
  • Deprivation of career opportunity
  • Wrongful infliction of emotional distress
  • Mismanagement of employee benefit plans
  • Retaliation

If you have an EPLI policy, your insurance company typically provides you with a defense attorney or reimburses you for your defense costs and other legal fees associated with a covered employee lawsuit—regardless of whether the claim goes to court or a settlement is negotiated before things get to that point.

Some policies may also cover discrimination claims against your business by third parties, such as a customer or vendor, while others may aid with any costs related to regulatory actions filed against your business by the U.S. Equal Employment Opportunity Commission (EEOC). However, neither punitive damages nor civil or criminal fines are covered by this policy.

Additionally, liabilities such as on-the-job injuries and illness that are usually covered under another policy, like workers’ compensation, are also excluded from EPLI, which is why it’s essential to have a portfolio of business liability coverages to help you safeguard your company.

What does Employment Liability Practices Insurance cost?

The Gilbert Insurance team is here to help you select appropriate EPLI coverage and find it at a competitive rate. We work with a wide variety of top insurance carriers to provide our clients with policy coverage limit options ranging from $50,000 to $1 million or more. A policy with coverage at the lower end of the range might be appropriate for a smaller business, while it might be necessary for a larger company or an organization with highly compensated employees to secure coverage at the higher end. In addition, many of the companies we work with offer complimentary risk management services to businesses, including free human resources consultations and online HR resource centers.

All of this is to say that the cost of your specific policy will depend, in part, on the amount of coverage you select. Additional factors include the type of business you own; the number of employees you have; whether your company has been sued over employment practices in the past; and your level of risk for a future lawsuit based on your industry, hiring and termination practices, employee turnover rate, and more.

In addition to assisting you in evaluating all of these factors, a Gilbert professional will help you determine whether your company’s situation warrants a stand-alone EPLI policy or if this coverage can be added as an endorsement to your businessowners policy (BOP) or commercial package policy (CPP). For our small and midsize business clients, including it in their BOP or CPP is often the most cost-effective and simplest way to get this invaluable protection.

If you are considering a new EPLI policy or want an experienced and knowledgeable professional to provide you with an opinion about the coverage you have now, please feel free to contact us for more information, guidance, and a quote.

Gilbert Insurance has served the EPLI needs of businesses like yours, including: