Employment Practices Liability Because Your Employees are NOT Your Friends

I include a discussion on Employment Practices Liability as part of each diagnostic appointment I have with every business insurance client I meet with.  I say the same thing to everyone:

“Your employees are not your family, and they are not friends, even if they are.”

Employment Practices LiabilityUnfortunately, from about seven out of ten business owners, the response I get in return sounds something similar to this,

“We’re like a family here. We don’t have to worry about things like that.”

I, in turn, reply with,

“That’s great! Have you ever gotten upset and said or done something you regret to a family member?”

Best friends, husbands and wives, fathers and sons, brothers and sisters break-up successful businesses every day because of disagreements over how things are done.  If you don’t believe me, read the local newspaper or ask your local gossip.

These situations often get very nasty.  An organization’s dirty laundry is often used as leverage, and information starts to surface that you might of otherwise been able to keep hidden. That when lawsuits start to fly.

Your Employees Are Not Your Friends, and They Are Not Your Family, Even If They Are.

Your employees are your employees, and you must take the necessary precautions to protect your business.

Employment Practices Liability

Many business owners are under the misconception that employment practices liability only covers discrimination.  The truth is employment practices liability provides coverage for a bunch of crappy things that can take place within your organization.  It’s as much of a MUST-HAVE coverage as general liability.

Coverage is provided for but not limited to:

  • Discrimination: Disability, Racial, Religious, Gender, Age, and all other protected classes
  • Sexual Harrassment
  • Wrongful Termination
  • Unsafe Workplace

Many Employment Practices Liability policies also cover wrongdoing by 3rd parties. You hire a contractor to come into your office and update the kitchen.  Over the course of a week of work, he continually makes advances at your receptionist. When she denies his advances, he goes psycho and begins to stalk her.  She no longer feels comfortable or safe working in your office and files a lawsuit for emotional distress and lost wages from missed work.

What did you do? You just hired a contractor.  But as the owner of a business with employees, you are responsible for every person that comes into your office.  That is Employment Practices Liability.

The Rub

I read a story in a trade journal the other day about a CEO being fired for sexually harrassing his secretary.  He then turned around and sued the company for twice as much for wrongful termination.

Its a crazy world and YOU know that.  Don’t kid yourself into thinking that everything is rainbows and the dark hammer of awfulness can’t descend upon your Pleasantville business.

I don’t wish that day upon you. I just want you to be aware that it is a completely realistic possibility and help you prepare.

Contact The Murray Group today to discuss your business insurance program, including employment practices liability.

Thank you,

Ryan Hanley

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