Employment-Related Practices: Are You Prepared?
Employment-related lawsuits are a growing concern for employers of all sizes
•In 2004, the EEOC reported 79,432 charges filed for harassment
•Harassment charge receipts filed and resolved were $251.7 million. 
Win or lose, the average cost of legal fees and related defense costs for the average liability claim are approximately $114,0001
(not including settlement amounts).
As costs for litigation and damage awards climb, experts predict that employment liability will only become more complex. As a result, it is critical for employers to understand their exposures and options to manage the risk.  

•Strategies to reduce your company’s exposure
Two effective risk management strategies include:
  • Solid human resources practices
  • Employment Practices Liability (EPL) Insurance Coverage,
The three most common employment-related lawsuits today are: 
 
  • 1.   Wrongful termination - the discharge of an employee for invalid reasons
  • 2.   Discrimination - the denial of equal treatment of workers who are members
  •       of a protected class
  • 3.   Sexual Harassment - when a worker is subject to unwelcome sexual
  •      advances, obscene or offensive remarks, or the failure to stop such behavior

EPLI is a policy used to cover your risk due to the ever-changing legal and employment environment.  Employment practices liability (EPL) insurance works hand-in-hand with your internal employment practices to provide the necessary resources to defend your company against a suit or to pay a claim.

To best understand how to cover your EPL risk,
It’s important to know the potential sources:

Recruitment practices  -    Employment applications 
 Employment offers  -  Employee orientation 
 Annual conduct reviews  -   Enforcing performance policies  
Termination and  Improper documentation of the above items 

To limit your exposure, engaging in solid human resources practices is an important strategy in reducing your company's liability. To verify your HR policies and best practices, conduct a thorough HR audit. Some things to look for:
-   Verify the Employee Handbook outlines all policies and terms of employment 
  in clear and concise language;
- Require employees to sign an acknowledgement form for receipt of Handbook;
-  Develop training for supervisors including interview skills, performance reviews,
  ‘zero-tolerance’ policy, etc. 

Typically, the insurance underwriter will require 
       A copy of your Employee Handbook 
   --------Which should cover the following policies-------- 

 -Sexual harassment
- Discrimination
- Equal opportunity
- Internet usage/employee privacy
- Internal job postings
- Alternative dispute
- Employment-at-will
- Employment application form

- Grievances
- Employee discipline
- Termination
- Performance evaluations
- Pregnancy leave
- Hiring and interviewing
- Resolution/arbitration
- Disabled employees and accommodations

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