Being an employer is a tricky endeavor. Yes, you need them to expand your business and serve your clients. And the good ones are truly invaluable. But when you become an employer, you take on a lot of additional potential liability as well.
It may be unfair.. It may be untrue.. It even be a “Pack Of Lies”!
First of all, even where claims are unfounded, the mere cost of defending yourself can be devastating for a small business owner:
- On average, if you settle out of court, expect legal fees of about $15,000.
- If the case is dismissed in a pretrial hearing, expect legal fees of between $50,000 and $75,000.
- If the case goes to trial, the average attorneys' fees top six figures.
Even if your state has a 'loser pays' law requiring plaintiffs in unsuccessful lawsuits to pay the winners' attorney's fees, it may not help you much. You will have a judgment in your hands, but that doesn't mean it's collectible. Meanwhile, you must still pay your attorney somehow.
Meanwhile, both the number and size of lawsuits and damages are on the rise:
- Over the last 20 years, employee lawsuits have quintupled.
- Wrongful termination lawsuits have more than tripled over the same period.
- 4 in 10 of these lawsuits have targeted smaller employers with 100 workers or fewer.
- If these cases reach a jury, the employer loses six times out of ten.
- The average jury award is over $200,000.
Add up attorney's fees and the average jury award and you have a
realistic potential liability of over $300,000.
That's why you simply MUST consider employment practices liability insurance, or ELPI.
ELPI helps employers protect themselves against a variety of employment policy allegations. Policy terms may include:
- Sex harassment cases - even where it's your employees, not you, who are being accused of the actual wrongdoing
- Unlawful retaliation
- Wrongful termination
- Emotional distress
- Giving a defamatory reference concerning a former employee
CAUTION: Wage & Hour Disputes Are Usually NOT Covered!
Note that policies frequently exclude coverage for claims arising from specific laws or types of claims, such as RICO, OSHA, FLSA, WARN, etc.
Most policies also cover attorneys' fees and court costs, over and above a deductible that you select. \
Right Now, Coverages Are Readily Available and Prices Are Reasonable. Act Now!