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Employment Practices Liability

Gallagher Healthcare :: Industry Insights
By Terra Andrews | 1/20/2015

Employment practices liability is an area of law focused on issues such as sexual harassment, discrimination, breach of contract, and wrongful termination, along with related issues. Wage and hour law violations are also included in this particular focus area.

There are 11 different types of employment discrimination recognized by the EEOC, and the number of claims filed and paid every year continues to rise. Having the proper insurance coverage in place to protect an employer from claims is an essential risk management strategy.

This coverage is especially important in healthcare organizations, because any employer can be sued by employees or third parties for liability under this particular law. Even when a company is innocent of any wrongdoing, that company still has to defend itself; which can become very expensive. The process of defending oneself from a lawsuit can drag out for weeks or months, raising the costs even further.  As such, healthcare organizations are focused on managing outstanding patient care, but also need to be attentive to the human interactions that take place within the company as well. These interactions can be between employees, management, vendors, & more. 

In 2012, employees most commonly sued their employers over race, retaliation, and sexual discrimination, including pregnancy and harassment. The continuous rise in the rate of lawsuits appears to be tied to the unemployment rate. Between 2007 and 2008, for example, employment practices liability claims rose 13%, while mass layoffs went up approximately 1/3. The correlation is strong.

Loss scenarios in healthcare organizations include everything from whistleblower claims to sexual harassment suits by nurses. Discrimination and ADA claims were also common, with most claims settling between $200,000 to $500,000. Even in cases where the defending healthcare company won, there were often high defense expenses, costing the company significant sums of money.

Gallagher can help with the inevitable exposure to potential employment practices liability claims in a number of ways. Even if your healthcare company already has coverage in place, it may not be the best offering for the price. We will review the current policy you have and analyze the coverage you are really receiving. We can also point out the areas of coverage where you may be lacking, and give you information on how you can improve it.  We can even make it simple for you to get a premium indication with only a few basic pieces of information. 

Gallagher can also offer you a suite of training and education programs suitable for both management and employees. Additionally, our loss prevention services are a great advantage and will help you lower the chances of being sued in the first place. Avoiding lawsuits is often much easier for a business than defending against them. While it is not possible to guarantee that your healthcare company will never be sued, minimizing your company's risk is a key risk management step and an essential part of ensuring your financial health.

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