Employment practices liability coverage can help your business clients protect their interests in the event of employment-related mistakes. As a business transitions from a sole proprietorship to an employer, the risks those business owners face change, too. Understanding the types of mistakes this insurance covers can help you better educate your clients about it and recognize when a client could benefit from this policy.
Employment Practices Liability Coverage Includes Harassment and Discrimination
Even with comprehensive policies to prevent sexual harassment or discrimination in the workplace, it is virtually impossible to eliminate the risk altogether. An employer facing claims of sexual harassment, age discrimination, or failure to accommodate disability needs could be liable for significant settlements without the right insurance coverage.
Employment Practices Liability Insurance Covers Wrongful Termination Claims
Disgruntled former employees may file a wrongful termination claim out of spite, or a business owner may find that a manager has terminated someone without adequate cause. Employers may also face wrongful termination if a hostile work environment forces an employee out. A wrongful termination claim could lead to significant financial liabilities for a business owner. Moreover, it could become more troublesome if the court orders income restitution and punitive damages. The right employment practices liability policy can cover these costs and save the company from the risk of financial struggles.
Employment Practices Liability Coverage Extends To Breach of Contract
Employment contracts are binding to both the employer as well as the employee. When an employer cannot follow through on their end of a contractual agreement, the employee may have a legitimate claim. While business owners can reduce this risk dramatically by allowing flexibility in their contract terms, they are accountable for any material breach. An employment practices policy can cover damages in these instances.
Employment Practices Liability Addresses the Failure To Promote
One thing that your clients may need to consider is the risk of a professional growth hindrance claim. If an employee feels that the employer passes them over for promotions, deliberately prevents them from making occupational progress, or otherwise interferes with an employee’s professional growth and career advancement, they may have a liability claim for failure to promote or professional interference. Employment practices coverage protects against risk exposures such as these.
Employment Practices Liability Covers Benefit Mismanagement
Employers are liable for mismanagement of employee benefits, including negligent investments with employee retirement funds, irresponsible decision-making for benefits packages, and the mismanagement of holiday, sick, and vacation time accruals. Employment practices policies often cover mistakes in these areas.
Before you sell your clients an employment practices liability policy, understand the fundamentals and its benefits. Protect your business clients and give them peace of mind with a liability policy that covers employment-related mistakes and oversights.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage, we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.