How To Proactively Mitigate Employment Practices Liability Claims

As COVID-19 vaccination rates increase and transmission rates of the virus decrease, employment practices liability insurance (EPLI) claims involving retaliation are expected to continue to increase as employees return to the workplace. Data from the Equal Employment Opportunity Commission (EEOC) shows that EPLI claims alleging retaliation have increased every year since 2003, with 37,632 workplace retaliation claims filed in 2020. The claims are typically filed in conjunction with discrimination or wrongful termination allegations.

The EEOC anticipates a rise in whistleblower claims from employees bringing forward concerns about health and safety in the workplace. Such claims may include employees concerned about exposure to COVID-19 due to unsafe working conditions or situations where employees allege they were wrongfully denied a request for leave or workplace accommodation.

The cost to defend and settle retaliation lawsuits has increased considerably in recent years, and the EEOC doesn’t anticipate that trend slowing down. With more workers bringing forth COVID-19-related legal actions, businesses are eager to purchase EPLI policies. However, the shift in the market has resulted in higher policy retentions, premium increases and new exclusions specific to COVID-19 exposures, and EPL insurers have started scaling back coverage.

Businesses can be proactive in mitigating EPL claims by:

•  Distributing an employee handbook—The handbook should contain the company’s equal employment opportunity policy and provide employees with steps for reporting discrimination or harassment.
•  Developing a code of ethics policy—Avoid ethical violations by developing and implementing a code of ethics and sharing it with all employees. This can help reduce an employer’s exposure to punitive damages.
•  Instituting handbook auditing procedures—Keep the handbook up to date on the latest law changes by having an audit procedure in place.

As employees return to the office, employers should review their EPL coverage and take proper precautions to avoid EPL claims. For more information on EPLI, contact us today.