White Paper

Employee Lawsuits Are Costly – Win or Lose. These 4 Trends Are Making the Risks More Severe.

Small neighborhood businesses and Fortune 500s alike are facing increased exposure to harassment and discrimination claims.

White Paper Summary

For many companies these days, the question is not if you will face an employment-related lawsuit, but when?

No matter how much you trust your employees or managers or how thoroughly you focus on training, it is extremely rare for a strategy to be 100 percent effective in avoiding claims of harassment or discrimination.

“The probability that a company will get sued for an alleged employment practices violation has increased dramatically; aggrieved employees drive some litigation, and, in other cases, plaintiffs’ lawyers encourage this type of claim,” said Beth Goldberg, chief underwriting officer, Financial Lines Division, Starr Insurance Companies. “These claims can be expensive just to defend, even if they are groundless.”

According to Westlaw, a legal research service by Thomson Reuters, plaintiffs win 51 percent of the time when employment practices liability (EPL) claims go to trial.

Losses from certain types of EPL lawsuits are also getting larger. Employment law firm Seyfarth Shaw LLP found that settlements for the 10 biggest class actions increased 55 percent from 2016 to 2017.

These damages, of course, don’t reflect the long-term impact to a company’s reputation. For all these reasons, boards are starting to take notice that, in today’s environment, an EPL insurance policy is not just “nice to have,” but an absolute necessity.

Four trends in particular are currently driving greater EPL exposure:

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To learn more about Starr Companies, please visit their website.

Starr Insurance Companies is a global commercial insurance and financial services organization that provides innovative risk management solutions.

Risk Matrix: Presented by Liberty Mutual Insurance

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The R&I Editorial Team can be reached at [email protected]