Employee lawsuits have soared. Some of those lawsuits were warranted. But you're more likely to be sued by an employee than to have a fire in your building.

Jussie Smollett and the Case for Employment Practices Liability Insurance

“Empire” actor Jussie Smollett generated plenty of headlines after allegedly falsely claiming he was attacked in a hate crime on the streets of Chicago. The hospital where he sought treatment also ended up in the news after firing a number of employees who purportedly improperly reviewed Smollett’s medical records.

Employee lawsuits have soared. Some of those lawsuits were warranted. But you're more likely to be sued by an employee than to have a fire in your building.

CCIG’s Jeff Parent.

Until late March, Smollett faced the possibility of prison time. But prosecutors abruptly dropped charges against him in a move that surprised legal experts. The hospital, on the other hand, now has a human resources drama on its hands and could find itself in civil court.

Why? Because at least one of the fired nurses claims she never accessed Smollett’s chart.

The nurse told a Chicago TV station she was called in at the end of her shift, fired on the spot and escorted out of the hospital.

She said she wasn’t asked any questions and never had a chance to offer an explanation. She said she never accessed the actor’s chart, but simply scrolled past it when looking for another patient’s name.

She also said she was appealing and believes others may have been fired for simply scrolling past Smollett’s name as well.

Assuming her appeal fails, the nurse (and her likewise dismissed co-workers) could then decide to file a wrongful termination lawsuit against the hospital.

The hospital would then naturally call in its lawyers who, in turn, would no doubt suggest filing a claim with their employment practices liability insurance policy.

With an EPLI policy, the hospital would get help from its carrier in defending itself against not just wrongful termination claims, but discrimination, harassment and other employment-related problems.

The hospital will still have spent plenty of its time and energy and suffered a public-relations black eye. But its EPLI policy will spare it some of the biggest expenses, including settlement costs.

The cost to insure your business with an EPLI policy is based on a variety of factors, including the number of people you employ, employee turnover, whether you have an employee handbook in place, and whether there have been prior claims against your company.

There’s more about EPLI policies, to be sure. But just keep the following in mind:

  • Employment practices liability coverage is commonly written on a claims-made basis, meaning that the incident would be covered so long as it occurs after any retroactive date on the policy.
  • As with any liability policy, be sure your EPLI coverage includes third-party liability so that it protects you against claims made by your employees against your vendors or customers.

Over the past 20 years or so, employee lawsuits have quadrupled. There’s no doubt some of those lawsuits were warranted. But it’s gotten to the point where you are more likely to be sued by an employee than to have a fire in your building.

If that’s not a good argument to consider EPLI coverage for your business, I’m not sure what is.

Jeff Parent is an Insurance Advisor at CCIG. Reach him at Jeff.Parent@thinkccig.com or at 720-330-7918.

CCIG is a Denver-area insurance brokerage with the full-service capabilities of a national brokerage. We do more than make sure you have the right policy. We also help you manage your long-term cost of risk with our risk and claims management expertise and a commitment to service excellence.

 

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