Small Business Sexual Harassment Insurance

A single sexual harassment lawsuit can cost a small business more than money. Apart from financial reparation, the reputation of your company can suffer irreparable damage. Without proper coverage, it is possible that a single lawsuit can bankrupt a smaller business. Employment Practices Liability Insurance (EPLI) provides small businesses the sexual harassment insurance that has become mandatory in today’s business climate.

Is Sexual Harassment Insurance Necessary?

Apart from the almost daily coverage in the media of sexual harassment suits across the country and around the world, the stats say, YES! You need sexual harassment insurance.

The EEOC receives thousands of sexual harassment claims each year and not just from women. Men represent over 15% of all the claimants. Whether you fight the suit or settle the claim, the costs are high.

The courts award millions of dollars in damages each year for sexual harassment suits and as the employing business, you could be the one paying.

What is Sexual Harassment?

Verbal or physical actions, sexual in nature, are classified as harassment. This could include bullying, coercion, or any sort of intimidation.

Sexual harassment does not even have to be directly inflicted. For example, if two co-workers share an off-color joke in the hearing of a third who takes offense, that could constitute sexual harassment. Since what is considered ‘offensive’ differs from person to person, it is easy for a situation to develop.

As companies scramble to update their employee training, the numbers of claims just keep rising.

How Can You Protect Your Small Business?

When a small business owner is faced with a sexual harassment claim, they need to have the proper coverage in place. Employment Practices Liability Insurance covers legal fees and court fees. In many cases, the insuring company can help with sexual harassment training.

How Much Does EPLI Cost?

The cost of EPLI, which includes sexual harassment insurance depends on a number of factors.

  • The size of the company
  • What type of business you own
  • How many people the business employs
  • Where the business is located
  • If you previously filed any sexual harassment claims
  • How long the company has been in business

The cost will also depend on whether the EPLI policy is based on occurrence or claims-made. One covers incidents that happen during the term of the policy, regardless of when the employee submits the claim. The other only covers claims made during the term of the policy.

The good news is that you can save money and protect your business by purchasing EPLI insurance coverage. And your premium costs are minimal versus the potential legal and court costs – on average, $75,000 even if you settled a claim out of court!

© Copyright 2021. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.