I’m sure you’ve seen these headlines.

For all 3 of these individuals, before there was actual proof that these events even took place, all 3 of them were “accused”, meaning that what was being charged against them wasn’t proven yet. However, the common theme is that all 3 of these people were being considered guilty until proven otherwise.

It turns out that all three were guilty of these horrendous crimes, but the thing to take away is that they were being considered guilty right away and if the accusations had been fraudulent, they would have had to fight and prove that they weren’t true.

Now think of this when it comes to the workplace:

  • Do you ever have one-on-one meetings with employees?
  • Have you ever said something that you feel could have been taken out of context?
  • Could an activity or some event that you hold rub an employee the wrong way?
  • How often are you interviewing potential employees?
  • How often are you terminating employees?

All of these things could bring forward what is known as an Employment Practices claim. An employment practices claim is when an employee or third party claims discrimination (based on sex, race, age or disability, for example), wrongful termination, harassment and other employment-related issues, such as failure to promote. Large corporations typically have substantial employment practices insurance coverage in place and are prepared to deal with just about any employment lawsuit. However, small or new businesses are often the most vulnerable to employment claims. That’s because they usually lack a legal department or employee handbook detailing the policies and procedures that guide hiring, disciplining or terminating employees.

With more and more cases of these high-profile allegations, the number of claims will also increase now that employees are becoming more familiar with their rights and when these rights are being infringed upon.

Think of the following example and then imagine if this is something you could envision happening to you:

You advertised for an open position. The individual who you are interviewing is a Hispanic woman. After interviewing her, you feel that she isn’t qualified for the job so you decide not to hire her. However, she believes that the reason you didn’t hire her was because she was Hispanic and a woman and not because she wasn’t qualified for the position. Even though this couldn’t be farther from the truth, you’re now forced to go to court and defend yourself against this false discrimination allegation. The trial goes on for a month. The verdict is that you are not guilty – Hooray! But to get to that verdict you just spent $30,000 in defense costs for an allegation that wasn’t even true.

Now if this happened to you, how would you feel? You just spent a month of your time, and $30,000 of your hard earned money to fight off a completely fraudulent claim that you knew from the start wasn’t true.

If you read that and thought “we don’t hire that many employees so I’m not concerned with that happening” then think about this example:

You have an employee who is a woman and one day you notice that she seems more dressed up than normal. You say to her “where are you headed all dolled up?” not thinking anything of what you’re asking. But this statement actually made her feel very uncomfortable, and now she won’t come to work in fear of being harassed about her appearance. This one sentence, which you felt was completely genuine, has now caused your employee not to feel comfortable coming to work and she brings a suit against you for sexual harassment. In the eyes of the court, they may feel like you overstepped and now you’re paying for the defense and potential settlement.


If you read those examples and still feel like “this isn’t something I do” then think about any of these possible scenarios:

  • A customer of Indian descent sued a retail store after an employee was found to be dancing around the store with a towel on his head after watching the surveillance tape. Customer awarded $420,000.
  • An employee was passed up for a promotion due to her not being of Christian faith after the company stated they would only hire Christians. Employee won $117,000.
  • A retailer told a disabled job applicant that they had no openings for persons in wheelchairs. After going to court, the jury awarded $3,500,000 to the plaintiff.
  • A company decided to require a strength test for career advancement, where 100% of those who passed the test were men. The women employees were awarded $2,300,000 in compensation.
  • A company held a work outing where guests were allowed to come. During the outing, a partner began yelling derogatory remarks towards one of the guests. The harassment and emotional distress constituted a $250,000 award.

After reading about all the ways that your employees and third parties could potentially sue you if you could purchase an insurance policy to protect you from situations like this would you?

What if I told you that all it would take to begin the process of getting this coverage in place is:

  1. Give me a call
  2. Discuss your business operations
  3. Complete an application

That’s all it takes to start the process! So if you read this article and are concerned about this exposure for your business, give me a call, and we’re already one step closer to getting you the coverage you need.

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