surance will skyrocket if a company has a
history of not doing the right thing,” Hewick
says. “The insurance companies will adjust
the price to where it is not cost-efective to
Training and other support services pro-
vided by insurers are valuable aspects of
these policies. They are designed to reduce
the risk of a claim and include policy review
and consultations about difcult employee
Poms provides complimentary audits
for its clients, says Steven Meilleur, senior
vice president of risk services, human resources and employment practices at the
insurance brokerage. He notes that these
audits frequently turn up risk factors,
such as a lack of employment practices
training, policy manuals that prohibit employees from talking about their salaries
(which is often illegal) and inadequate
policies that apply only to certain forms
of harassment (like sexual harassment)
while ignoring others.
But business leaders can’t aford to ignore
the chance that a workplace ofense could
put an organization in serious peril. “For any
company trying to mitigate its risk, I would
say that there is probably no other area [in
which] the average company has hundreds
of thousands of dollars of potential exposure
without insurance coverage,” Aidman says.
“I think obtaining such [EPLI] coverage is
a prudent thing to do.”
David Tobenkin is a freelance journalist
based in the Washington, D.C., area.
‘We try to find
the best terms
and pricing, and
incumbent is not
A BRIEF PRIMER ON COMMON BUSINESS AND
EMPLOYMENT INSURANCE PRODUCTS.
EMPLOYMENT PRACTICES LIABILITY INSURANCE (EPLI)
protects against claims arising from the employer-employee
relationship—from the job application process to termination, and
including allegations of discrimination, harassment and similar
charges. Lawsuits are often premised upon an economic injury to
an employee. EPLI typically protects the company, directors and
ofcers, and employees, including HR professionals.
GENERAL LIABILITY INSURANCE covers liability for bodily
injuries and property damage, as well as personal harm, such
as defamation of character. It protects the business, company
ofcers and employees.
DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE generally provides protection to these higher-ranking positions, and
often to employees, for management errors and omissions. For
example, it would cover harm caused by a business decision that
results in losses and shareholder suits alleging improper market
research. For private companies and nonprofits, protection can
extend to the organization itself. Sometimes EPLI coverage can
be added to this type of policy.
ERRORS AND OMISSIONS INSURANCE protects companies
and their workers from lawsuits alleging inadequate work or
negligent acts committed during business activities that result in
a financial loss to a client. Examples include a printer’s failure to
catch a typographical error on a large order or a plumber’s repair
that fails and causes property damage.
CYBER LIABILITY INSURANCE is for claims relating to inadequately safeguarding sensitive private data, such as credit card
information and Social Security numbers, often due to a data
breach caused by a hacker. It covers employers, directors and
ofcers, and employees.
WORKERS’ COMPENSATION INSURANCE is required by many
states for numerous classes of employers and pays the expenses
of an employee’s work-related illness or injury, including medical
and recovery costs, and limited economic harm, such as some
lost wages. Employees who collect workers’ comp insurance generally relinquish their right to sue the company for some related
civil claims, such as negligence.