Liability claims regarding employer practices represent a significant threat to companies today, as employees are increasingly aware of their rights and willing to take legal action over real or perceived issues. Still, many employers don’t have a clear idea of what employment practices liability insurance should cover. Employers can start by understanding the following common causes of claims.
Before an employer even decides to hire an employee, the employer could face liability for various reasons. If the job is misrepresented or posted in a way that discourages certain applicants, a claim could be made. Wrongful failure to hire can also provide grounds for claim, which means employers must have clear criteria in place during the hiring process.
- Inadequate Documentation
Some employees fail to provide written notice of the policies that guide their decision-making; others fail to document steps they are taking to address existing employee problems. Both kinds of documentation are crucial in guarding against employment practices liability claims.
- Poor Dispute Resolution
When an employer has ineffective processes in place for handling employee complaints, the employer may be seen as part of the problem. Employers should make it easy for employees to make official complaints, and employers should have policies in place to deal promptly with such problems.
Ensure Full Protection
Unfortunately, even the best policies and understanding of employment practices issues cannot prevent every claim. Besides trying to address common causes of claims, employers should make sure to defend themselves with employment practices liability insurance to cover claims that cannot be avoided.