California Employment Practices Liability Insurance

One angry employee shouldn’t be able to bankrupt your business…

When you run a business and employ people, there are rules and laws you must follow without exception. You can’t discriminate. You can’t refuse to pay someone for work they’ve done. You can’t and should never harass anyone, including your employees. Any one of these things can get you in hot water. Do it often enough, and eventually you’ll be faced with a major lawsuit.

Unfortunately, you can do everything by the book, treat every employee well, and still get sued.

From bad business practices, a lack of understanding, or just bad luck — whatever the reason — employment practices liability insurance is the best answer to a surprise lawsuit.

California Employment Practices Liability Coverage

What kinds of events or accusations are covered by a California employment practices liability insurance policy? More than you might realize.

• Discrimination
• Harassment
• Retaliation
• Wrongful termination
• Wrongful failure to promote
• Wrongful discipline
• Violations of the Family & Medical Leave Act (FMLA)

Many lawsuits occur for wage disputes, overtime and wage calculations, and wrongful termination.

Sometimes it’s a bad act from a supervisor or manager. In other cases, a current or former employee is angry and wants to take their pound of flesh from your company.

Depending on the size of your business, California employment practices liability coverage may either be added on to your current general liability insurance or purchased as a separate policy. Most policies are written on a claims-made basis which means that in order for a claim to be covered, the incident has to occur during the coverage period.

Protecting Your Business

While large companies have large insurance policies as well as legal and Human Resource departments to keep them out of trouble, most small businesses don’t. You can use some of what big businesses do well and apply them to your company.

• Create an employee policy manual to outline company expectations and how everyone will be treated.
• Create a zero tolerance policy for discrimination, harassment, and other bad behavior.
• Institute a way for employees to bring their concerns to you if they feel a supervisor has not behaved properly.
• Screen potential employees carefully before hiring, including background checks and checking references.
• Add employment practices liability coverage to your business insurance policy because even in the best situations, someone may still sue.
• Talk to an attorney or employment expert to make sure you understand your obligations as a business owner and employer.

At IBW, we understand the potential liability a business can face. We’re here to help you protect your business and your future so you can continue doing what you love. Your company provides jobs, helps the economy, and takes care of your family. It shouldn’t be lost because of one angry employee.