Any company that uses employees should strongly consider purchasing employment practices liability insurance. There are a lot of companies out there who purchase general businesses insurance policies and just assume that they will be covered for everything related to their employees. This is incorrect. When it comes to the employer-employee relationship concerning legal matters, it can get quite complicated.
General business insurance policies do not cover claims made by employees concerning harassment, discrimination or wrongful termination. These are all claims that employment practices liability insurance will cover. They will also cover defamation, invasion of privacy and retaliation, which has become a more common occurrence due to the new whistleblower laws. However, this still doesn’t mean that you will have all of your bases covered. When it comes to hour violations, wage violations or statutory penalties, most employment practices liability insurance policies won’t cover you.
If you refuse to pay an unreasonable settlement, then you will want to consult with a defense counsel. The insurer might require you to hire a counsel that is selected by the insurer or that has the consent of the insurer.
If you run a company, then you’ll want to protect yourself financially against any type of lawsuits brought on by your employees or ex-employees. While general business insurance will help cover certain claims, employment practices liability insurance will cover a much broader spectrum of claims.
For more information about insurance policies for business owners, be sure to contact us online at CCW Insurance today.
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