Hollywood shows the importance of Employment Practices Liability Insurance

#MeToo

As more details and more victims emerge from the Harvey Weinstein scandal the hashtag #MeToo has been trending on social media. Started by Alyssa Milano as a way of uncovering the scope of the problem, she asked her followers to reply: “Me Too” if they have been sexually harassed or assaulted.

Less than a day after her initial post, more than 53,000 people had replied to her and #MeToo has been posted millions of times across all social media platforms.

The new normal

With all the attention this scandal is generating there is a hope that women across the country will feel more comfortable sharing their experiences and help to remove the stigma often associated with the victim of these assaults. The sheer magnitude of the social media response is very encouraging and hopefully will effect real change. With more people speaking-out employers should be aware of the ramifications of this new normal and protect themselves from what is a significant insurance exposure.

Unlike most businesses, Hollywood is a collection of independent contractors working with each other for specific projects – like a movie or television series. There is no single Human Resources department to complain or report problems to. There are no sexual harassment policies in place or mandatory meetings all employees must attend. As a result, people like Weinstein were an open secret in the industry and for some strange reason their behavior was tolerated.

In the “real word” one would like to believe that there is no room for this type of behavior. All companies should have written policies and training in place, not just for sexual harassment, but for all types of employment related discrimination. Unfortunately, there is no way to completely avoid these types of issues. Any one of your employees (or even a third-party vendor) can disregard all your careful planning and open your business up to an employment-related suit.

How to protect your business

From large corporations to small businesses with one or two employees, no company is immune to an employment-related suit. With the number of lawsuits already increasing it would not be surprising if the trend increases after this most recent scandal. The only way to protect yourself from the cost and time to defend your business from these types of claims is to ensure that you have the proper Employment Practices Liability Insurance (EPLI). EPLI covers businesses against claims by workers that their legal rights as employees of the company have been violated.

Sexual harassment is only one type of claim this policy protects businesses from; discrimination, wrongful termination, breach of employment contract, negligent evaluation, wrongful infliction of emotional distress, mismanagement of employee benefit plans, among other instances can all lead to an employment-related claim.

How much coverage you need

Most business owner’s policies will include some coverage for EPLI, usually around $25,000. However, the average cost of an out-of-court settlement is $75,000 and a jury trial averages around $217,000. With 41% of employee lawsuits brought against private companies with 100 or less employees, the extra cost of not having enough EPLI coverage can have a severe financial impact on your business.

Don’t be unprepared, sooner or later every employer will face some sort of employee-related suit. If you have questions about your EPLI coverage or would like to see how affordable having the correct limits can be, contact Shove Insurance today to schedule a complete policy review.