Employment practices liability policies help protect Massachusetts businesses from employment-related liability claims. For covered claims, policies typically help pay both legal fees and settlements associated with the claims (up to the policies’ limits). Here are some examples of incidents that your business could be involved in and an EPLI policy might cover.
What Sorts of Incidents Could My Massachusetts Business Face That an Employment Practices Liability Policy Might Cover?
You Ask an Inappropriate Question During an Interview
Certain questions are off limits when interviewing. For instance, employers aren’t legally allowed to ask whether a job applicant has been arrested, is married, has children or observes particular religious holidays. (These are just some of the interview questions that are prohibited by law.)
Should you ask one of these questions, either directly or unwittingly while making small talk, an interviewee may claim you invaded their privacy. Even if you decide to hire them, they might still file a claim over the invasion of privacy.
Most employment practices liability policies would cover such an incident, as most policies offer coverage for invasions of privacy and their coverages typically apply to interviews.
A Manager Discriminates Against an Employee
When evaluating employees’ performance, managers have many considerations they’re allowed to take into account. They can weigh an employee’s performance, dedication to the company, personal achievements and similar factors. They aren’t allowed to take an employee's age or skin color into consideration.
If a manager discriminates against an employee based on their age or skin color, the employee may have a strong claim against your company -- especially if they were denied an opportunity or promotion. Such practices are prohibited by federal law.
An EPLI policy might not protect the manager who actively discriminated against an employee, but the policy likely would help the company defend itself against and settle any claims that arose from the incident. Discrimination based on age, race, religion and several other items is frequently covered by ELPI policies.
Women in Your Business Are Paid Less Than Men
The wage gap between women and men is narrowing, but it still can be found in many Massachusetts companies. As awareness of this gap continues to grow, the likelihood of anti-discrimination lawsuits also increases.
If your business pays women less than men who are similarly qualified and in comparable positions, the business might one day face an anti-discrimination lawsuit filed by one or more female employees. Discrimination based on gender is also illegal under federal law, and this is a common form of gender-based discrimination.
An EPLI policy may cover such a suit, depending on the policy’s terms and conditions. Lots of policies cover gender-based discrimination claims, but whether your business was covered in such an incident might be affected by when the discrimination took place, when a claim is first filed, when your business’ policy was in effect and what type of policy it is.
Your Massachusetts Business’ Employee Benefits Package is Mismanaged
Employees’ benefits packages make up a significant portion of their compensation. Employees frequently depend on these for their daily healthcare, as well as their long-term savings. Some employees even make job decisions based on the benefits packages they’re offered
If the benefits package your business offers employees is mismanaged, one or more employees may file a claim seeking compensation for the losses they incur. Such a claim could be financially devastating to your business’ finances, as each employee might be owed something.
In addition to discrimination claims, EPLI policies frequently also provide coverage for the mismanagement of benefits packages. A policy may provide appropriate compensation for each employee, so your business doesn’t have to directly.
Learn How an Employment Practices Liability Policy Could Protect Your Business
To better understand the potential employment practices liability issues your Massachusetts business may be exposed to, talk with your business’ independent insurance agent. They’ll be able to provide more examples of potential scenarios that could be financially devastating for your business, and they can explain how an EPLI policy may help protect your business from these possible scenarios.