Business Owners' Liability Coverage is Critical
Employment practices liability coverage is critical in protecting your insureds from the potentially catastrophic costs of employment litigation. Most people would never consider dropping fire insurance, but today the chances of being sued by an employee are even greater than the chances of having a fire.
Here are some examples of claim situations:
A company settled a class action suit brought by job applicants who charged that certain questions asked in a pre-employment psychological exam violated their constitutional right to privacy as well as various state labor laws.
After reporting multiple incidents of repeated sexual harassment by a supervisor, an employee alleged the supervisor began a systematic campaign to force the employee to resign. The court award in this retaliation/wrongful termination complaint was $210,000 for mental anguish, $330,600 in lost income and $1.9 million in attorney fees.
A Midwestern electronics company settled a class action lawsuit alleging a violation of the Age Discrimination Employment Act (ADEA) for $7.1 million. The suit was brought by approximately 800 employees whose jobs were moved to Mexico after a downsizing at the company's U.S. Facilities.
Casualty Exposure Checklists
Insurers Obligation at Time of Loss
When filing a claim, your policies require that you follow specific procedures and comply with certain provisions.
- Immediate written notice of loss must be given to the insurance company in the event of fire and/or other direct damage to property.
- Notice of loss should include description of how, when and where the loss or damage occurred.
- Notify the police if a law may have been broken, as in the case of burglary, theft or vandalism.
- You are obligated to take all reasonable steps to protect your property from further damage. Examples are boarding up windows, making temporary repairs to roof if damaged, etc. Keep records of your expenses for consideration in the settlement of your loss.
- Complete inventories of the damage or destroyed property must be provided, including quantities, costs, values and amount of loss claims.
- You must see that any injury or damage is reported as soon as possible.
- Full details of the claim should include how, when and where the "occurrence" took place; the names and addresses of any injured persons and/or witnesses; and a description and location of any damaged property.
- If a claim or suit is filed against you, you are obligated to cooperate with the company. The policy prohibits you from making any voluntary payments or assuming liability in any way.
- You are required to report any occurrence that may result in a claim; therefore, you should emphasize to your employees the importance of reporting any incident to management, no matter how insignificant they feel it may be.
Regardless of the type, all losses should be reported to us in writing as soon as possible.
Due to the wide range of commercial insurance available, we suggest contacting Michael Yerkes directly. Please feel free to call Michael at (610) 869-4065 ext. 5.
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