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Don’t think that the answer is simply “yes.” A business’ action may depend upon circumstances such as whether an employee’s duties involve driving a company vehicle or directly involves customers and if the company can prove that such behavior fails to meet the applicable job standards.
Hiring and firing practices have become legal minefields that have spurred the development of Employment Practices Liability Insurance (EPLI). EPLI is specifically designed to protect employers from lawsuits brought on by employees, providing coverage for many situations that general liability insurance does not.
According to industry experts, unpaid internships, illegal background checks, and issues related to pregnancy and health are the top trending employment practices litigation cases. The cost of claims is rising, as is the length of time it takes to resolve EPLI claim. Even lawsuits that are thrown out of court or are won by your company are expensive, due to the high cost of securing legal defense. Because of this, EPLI insurance coverage is very important as financial protection for your business.
Policies and premiums for this type of coverage vary tremendously among insurers. Many companies offering the coverage also offer assistance in writing policy and procedure manuals and other ways to reduce the potential for claims involving sexual harassment, wrongful termination, or discrimination. No business is immune from these claims.
It is important that a business has clear policies that are applied consistently to each employee and that directly relate to their job.
Having access to legal counsel that has expertise in this special area of the law is a key aspect of protection. Another key issue is documenting the essential job functions and establishing measurable standards for each position. Use of regular performance reviews and applying the standards equally to each employee is a smart employment practice. The best defense against employment practice claims is to know the law in your state and then having policies and procedures that meet or exceed its legal standards.
The U.S. Department of Labor offers a Small Business Handbook from their Website at http://www.dol.gov. The U.S. Equal Employment Opportunity Commission also offers numerous publications addressing different employment laws from their website at http://www.eeoc.gov.