No one would argue that today’s society is possibly the most litigious in U.S. history. Large jury awards that make headlines only spur on many that otherwise may have backed away from action.
The insurance industry, always perceived to have deep pockets, employs thousands of lawyers to defend itself in thousands of cases filed each year. In this issue of Insurance Journal, Zurich provides its view of today’s workplace and how insurers can help their business policyholders minimize the risk of “on the job” lawsuits and insights into Employment Practice Liability Insurance (EPLI) coverages.
Claims on the rise
Some of the statistics related to EPLI litigation are eye opening.
From 2000 through 2004, slightly more than 405,900 charges were filed with the Equal Employment Opportunity Commission. Not included in these complaints are claims filed with comparable state agencies or filed directly in state and federal courts. Once-rare judgments and settlements of more than $10 million are now more common, and the number of million-dollar settlements is rising, Zurich cautions.
While the impact of a multi-million-dollar claim may be severe for any company, one such claim could jeopardize the survival of a small or midsize business. Further, as devastating as the financial impact may be, these dollar amounts still do not include the soft costs of disruptions to operations, loss of employee morale and damage to a company’s reputation or brand identity.
Laws complicate issue
Laws passed with the good intentions of protecting workers’ rights, such as the Americans with Disabilities Act of 1990, the Civil Rights Act of 1991 and the Family and Medical Leave Act of 1992, also provide a cause of action for much litigation. Federal and state laws govern nearly every aspect of the workplace, from hiring to employment practices to termination. These laws have left many companies struggling to interpret and comply with hundreds of pages of seemingly ambiguously worded provisions. This can be especially difficult for the small to midsized company that does not have legal or employment specialists on staff, Zurich warns.
No company, no matter the size, is immune from workplace lawsuits. There are a variety of concrete steps that can be taken to help business owners protect themselves from workplace lawsuits. Zurich’s article (page 38) in this issue offers practical advice for insurers, agents and business owners that goes to the heart of the issue in the goal to minimize the risk of workplace lawsuits.
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