Today, I would like to go into a bit more detail on the types of sexual harassment claims, so that you understand how to avoid this happening in your company. In particular, what happens when an employee acts inappropriately? Will EPLI protect you, the employer, from costly legal fees?
Increasing Claims of Sexual Harassment
With the spotlight on the numerous claims of sexual misconduct appearing in the news, many business owners have started to think more about their own liability. All it takes is an off-color joke, an inappropriate comment, or even an office romance gone bad to create an incident.
In fact, employment practice claims are some of the biggest liabilities that companies are facing today. On an annual basis, more than 200,000 claims are received by the Equal Employment Opportunity Commission (EEOC) and major funds are collected and funneled into settlements and penalties for claimants. And it doesn’t look as if that number will go down.
Should You Worry About Sexual Harassment Claims?
The stats show that no company (with the possible exception of sole-proprietors), are immune to risk. Sexual harassment laws apply to all businesses regardless of size. Because of this, a greater number of small businesses are following the example of larger corporations and purchasing EPLI.
Types of Sexual Harassment
You may not realize that there are different forms of sexual harassment. California law separates sexual harassment into two types.
Quid Pro Quo Sexual Harassment
The first kind of harassment occurs when an employee is offered advancement or threatened with penalties as a consequence of sexual favors. The offer or threat can be overt or implied. A single instance can result in a lawsuit.
Hostile Work Environment
The second is when someone endures repeated harassment, verbally or physically, which allows them to claim a hostile work environment. If the courts do not feel that a company has addressed the situation appropriately, they can find the company liable for damages.
Protect Yourself with EPLI
Because of the continuing global outrage related to sexual harassment, most companies are reviewing their sexual harassment policies and training. They are also contacting their commercial insurance agents to make sure they have adequate EPLI insurance to ensure their policy will cover legal fees and compensatory settlements.
If you employ more than one person and you have not reviewed your EPLI policy in the last year, you should call your agent today and ask about your coverage. They can give you more information on the amount and types of coverage that will best suit your needs.
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