Employment Practices Liability Insurance

HRH

Do any of you have opinions on this type of insurance (to cover lawsuits on termination issues, sexual harassment, etc) and if you think it's a good idea, how much coverage per incident would you think is enough?? Many thanks!

mushroomHR

I don't know all the deatils of EPLI but our company does carry it as part of our liability coverage.

Down_the_Middle

I personally think that EPL coverage is important, regardless of the "condition" of your HR policies. EPL covers you from mgr's that either deviate or are inconsistent and with large mgt teams, I think it's prudent to have it. The list of areas that typically stimulate employee lawsuits is growing and I find that's it's a fundamental part of our whole risk mgt portfolio. The avg jury verdict for employers in 2003 was something like $250M....... We have a $5M policy with a sizeable deductible and the annual premium is under $10K. It all boils down to your capacity for risk........... We';re large enough to handle most small to moderate dollar amounts--------but want protection for those goofy cases with runaway juries. The best defense, is of course to have your HR house in order, but we all have cracks in the foundation!!

lorrie

How good are your personnel policies AND practices? The better they are, the less important EPL becomes. However, even with perfect policies and practices, and a great defense, a lawsuit can be costly.

As for how much coverage: how much risk is your company willing to take?

The answers are vague, but there are so many factors to choosing insurance amounts that it is hard to give a specific idea. I think $1,000,000 limit is common, and hope it would be enough, but there are no guarantees.

Dutch2

We have it for all of our senior management staff - those making the decisions that have the most impact on the company. Never needed it..... so far, but I am glad we have it in the background, just in case.

dchr9203

We're a privately held company and this is considered very important by our owners. I think its a good idea regardless of public/private status. $1m seems to be an common benefit amount.

SMace

The only advice I can give is to be SURE you understand what you are buying. Most likely the insurance company will have full control over which attorney you will use and whether or not you are going to settle. Keep in mind insurance companies love to settle. If those things don't sit well with your culture, make sure the leaders know it going in.

TN HR

It boils down to how much risk you're willing to assume and if the costs of such policy justify the comfort level it will bring. Understand that these policies do not prevent lawsuits, nor do they make them go away. Some would even argue that they invite litigation, but that is strictly a matter of opinion.

We carry one for a substantial amount, coupled with an umbrella policy for an even larger and more obscene figure. However, I am not suggesting it is a requirement.

Gene

LivindonSouth

It's not so much a matter of 'how good your practices are' as it is what risk you run in your jurisdiction of a jury pool populated totally with goofy jurors, some of whom will not have worked for several years, some of whom hated every boss they ever had, some of whom have no work eithic or a terrible one.

This state has become popular recently for multi million runaway verdicts against drug companies and others simply because they can get away with it. Down here several lawyers have built 10 million dollar houses on the backs of Asbestos juries. Propulsid is another. The multi-billion dollar nationwide tobacco lawsuit began right here, I'm not proud to say.

The Fen Fen case two years ago awarded over a hundred thousand each to about 15 obese women, none of whom had jobs and most of whom had relatives on the juries and they were willing to lie to the court. Now, one by one they are pleading guilty to false testimony and are going to jail and several lawyers will probably follow. Every time an employer gets close to being sued around here, the first conversations from the attorney are about rolling the dice on juries and going for federal jurisdiction or a county other than the inner city, capitol city county.

You can have the purist of intentions and the most pristeen of policies and operations and not stand a chance in court.

It's the same with uninsured motorist coverage that you'd better have if you own a car. You know you'll never cause an accident, but half the drivers have no coverage and you'd better pay to have that tacked onto your coverage here.

E Wart

This is the second company I have worked for that we have taken this out... and I highly endorse it.
I agree about make sure you understand the policy. May not cover everything and also SMace is correct about the lawyers being selected by insurance company. (I did have to use them at my previous employee and the attorney was from a well known firm and was quite good. Insurance companies don't want to have to pay out anything/loose. We won by the way, but did take a lot of time.)
E Wart