How Employee Liability Insurance Fits Into Your Business

You will always dream big when you start your own business. Your workforce is among the many aspects that can turn your business into an empire. However, business owners often face many employment liability risks. Small companies are susceptible to employment claims, which threatens to be costly.

Most startup business owners never consider liabilities when they are building their companies. Employment Practices Liability Insurance provides coverage for employee claims.

​Employment Practices Liability Insurance Coverage
Having a business means that a lot of employees are going to interact with you or with each other. However, not all interactions are beneficial. There will be incidents within the company that will result in employee claims that a business owner must oblige to, according to the law.

Here are the incidents that the insurance policy can cover:

• Discrimination
• Harassment
• Retaliation
• Wrongful Termination
• Breach of Employment Contracts
• Invasion of Privacy
• Defamation
  
  

The cost of battling employment lawsuits is massive. The allegations alone can cost your company in defense. Businesses will have to pay up about six to seven figures even if the claims against the company are false. According to a Hiscox 2015 survey, an average defense cost of $125,000 will hit one in five businesses under 500 employees because it will be facing employment charges

The figures alone are scary, which makes sense for a business owner to consult their attorneys about having employment practices liability insurance.

How to Protect Your Company
It is highly unlikely for a business to avoid facing a lawsuit from a frustrated employee. Small companies often have no access to legal counsel like large corporations, which makes them vulnerable to employment claims. However, small businesses can protect their companies and employees to avoid doing damage.

Business owners can include policies in the employee handbook that can be very helpful in avoiding employment claims. Here are the necessary company-wide policies that a business owner should have in their manual:

• Anti-discrimination
• Anti-harassment
• Equal employment opportunities
• Anti-retaliation.
  
  

As a show of good faith, business owners must also encourage employees to report incidents with a complaint procedure. Any conflict within the company will be put through investigation and will be taken care of before any lawsuit. Business owners must also make sure that the policies are suitable for state, federal, and local law.

Communication is Key
To apply company policies, business owners must make sure that the message reaches the team effectively and clearly. When hiring employees, business owners can have them sign acknowledgments that they understand the policies. If an update comes, make sure that the employees can review it. Communication will do wonders for everyone in the organization if the policies are accessible.

It is also essential for business owners to train their team about the procedures and policies. They must teach their managers how to uphold the policies to their team members. Most states require companies to conduct sexual harassment training. It is up to management to decide on how to approach the training. The training and company policies are beneficial for the company, business owner, and employees.

At CSIS Insurance Services, Inc., we aim to make our client's life easier with policies that are tailored to their needs. You can get more information about our products and services by calling our agency at (888) 501-2747. Get your free quote today by CLICKING HERE.