Over the last 20 years, employee lawsuits have increased about 400%. Wrongful termination suits have risen about 260%. An employer has a higher chance to be sued by an employee than having a fire at a workplace, and this applies to companies of all sizes. More than 40% of employee lawsuits are brought against private companies with less than 100 employees.
One in Every Ten Employers Gets Charged with Employment Related Violations
Nationwide, 1 in 10 employers would face an employment charge annually. In California, the chances for employers getting sued by employees is 40%, one of the riskiest states according to HR Morning, a news site for HR professionals.
Types of Lawsuits against Employers
Employees can file lawsuits over discriminations of all kinds, harassment, wrongful termination, illegal background checks, unpaid interns, breach of contract, false representation, retaliation, hostile work environment and emotional distress, etc.. Even inadvertent non-compliance with federal laws such as Family Medical Leave Act, the Americans with Disabilities Act and the Whistleblower Protection Act, can become causes of actions.
Good and law-abiding employers do get sued in this litigious culture. Sometimes a verdict can be rendered upon hearsay evidence of “he said, she said”.
Costs related to Employment Related Lawsuits
According to the law firm of Murphy Austin Adams Schoenfield LLP, here are average court costs and legal fees:
- Average court costs and legal fees when settled out of court: $10,000 to $50,000
- Average court costs and legal fees when the case is dismissed: $10,000 to $15,000
- Average court costs and legal fees when the case goes to trial: $150,000 to $200,000
HR Morning states that:
- The average EPLI lawsuit settlement is $125,000.
- The median judgment against an employer is about $200,000.
- 25% of judgments are more than $500,000.
Often the defense costs can top out around $300,000 – $500,000 and the time for reaching resolutions can take between 18 and 24 months.
The cost of settling out of court averages $75,000, and the average jury award hits $217,000 if you go to court and lose.
There are other hidden costs of employment lawsuits, such as cash flow crisis due to legal fees, lost productivity and employee morale, damage to reputation, increase in brand management and PR cost, disruption to personal life, distraction from managing team and loss of profit ….
What Does EPLI Cover
EPLI is specifically designed to protect employers from lawsuits by employees. General liability insurance does not provide coverage for many EPLI situations such as compensation for losses caused by employee lawsuits. All court costs and legal fees are included in EPLI coverage.
When an employer gets sued, hiring legal defense is expensive even if a lawsuit is dismissed in court. With EPLI coverage, an employer can timely fund the legal defense and settle a lawsuit ASAP – very important financial and brand protection measures for an employer and a business.
In addition to legal claims, EPLI protects against other statutory violations, wage and hour violations, libel and slander, wrongful denial of workers’ compensation, loss of consortium, false results from drug tests, etc..
However, about 7 out of 10 businesses don’t carry EPLI insurance, according to an industry study, under the erroneous belief that they are protected under other policies. A study done by Advisen found that only 23% of companies with fewer than 100 employees purchase EPLI insurance; that number is 34% for companies with 500-700 employees and 40% for businesses that employ over 1,000 people.
We Customize Each EPLI Policy’s Premium
The premium for buying EPLI insurance can be a fraction of what an employer will have to pay out of pocket for an expensive lawsuit, especially if the suit is lost. With EPLI paying for legal fees, a business can avoid cash flow difficulties if attorney fees are not budgeted.
Different businesses have different needs for EPLI coverage depending on the industry and employment activities. We pride ourselves at customizing policies for each and every employer. No under-coverage, no overpricing. We and the employers brainstorm together to study business operations, analyze their company’s financial statements while keeping the information confidential.
We base the premium upon careful evaluations of factors such as past history of employment lawsuits or complaints, existing HR policies for preventing discrimination and harassment, and the number of employees, etc.
We are known as the extra-milers in serving businesses and employers with tailor-made policies. We will leave no stone unturned to find the best value in order to give business owners the peace of mind.
Call: (925) 788-5558, Email: email@example.com, Visit our website www.HOSPROP.com.