Swifties, as Taylor Swift’s fans are known, were no doubt glued to their screens as the jury’s verdict was announced at her recent groping trial.
A few insurance industry lawyers also were probably tuning in, though perhaps for a different reason.
The federal trial in Denver, in case it missed your attention, focused on a 2013 meet-and-greet in which the pop performer alleged that a radio DJ put his hand up her skirt and grabbed her backside during a photo opportunity.
After about three hours of deliberation, jurors ruled in favor of the singer, granting her the $1 in damages she sought. The jury also unanimously agreed that the DJ was not entitled to compensation that he had sought in his own lawsuit.
The DJ filed his suit after being fired by the radio station, alleging that Swift, her mother and her radio liaison purposely destroyed his career. Swift then countersued for the $1.
The station could have easily found itself on the hook for much more than that. It could have faced tens of thousands of dollars in legal defense costs alone had Swift added it to the defendant list and sought higher damages.
The station, in other words, got lucky. Swift, it appears, was most interested in making her case public so that she could provide an example to other women “who may resist publicly reliving similar outrageous and humiliating acts.”
But what if the station had been dragged into this mess? What if Swift wasn’t a pop star with resources aplenty and instead someone keen on exacting revenge by emptying the wallets of the alleged perpetrator and his employer?
It happens. A lot. So much so that, believe it or not, employers today are more likely to get sued for their employees’ bad behavior than to be struck by fire.
That’s where an employment practices liability policy with third-party coverage comes in.
EPLI provides compensation for losses that arise from such lawsuits including all court costs and legal fees.
More crucially, third-party EPLI protects the insured entity and its employees from allegations of various wrongful acts committed against the insured’s customers, clients, vendors, suppliers and visitors.
Third-party wrongful acts include harassment claims that allege unwelcome sexual advances or requests for sexual favors. Some policies also respond to allegations of mental anguish, emotional distress and humiliation. Some go so far as to cover allegations of assault.
If your organization has a lot of interaction with the public – a radio station, for example – it is especially vulnerable to third-party claims. Hotels, restaurants, country clubs and the real estate profession also are prone to third-party claims.
Whether the DJ’s former employer carried third-party EPLI is unknown. But there’s hardly any doubt it should have it now.
By the way, to protect your organization from third-party claims, it’s not enough to merely purchase coverage. You must implement policies and procedures that address discrimination and harassment issues. In fact, EPLI insurers are increasingly requiring employers to put these practices in place before they will issue a policy.
Andrew Mahoney is a CCIG Insurance Advisor. Reach him at AndrewM@thinkccig.com or 720-330-7925.Back to Resources