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Small businesses, big risks: Everyone needs EPLI

The growing tide of job discrimination claims, spurred by the sluggish economy and more worker-friendly laws, is putting more small businesses on the defensive.

By Jeffrey O'shaughnessy | Updated on February 14, 2010
Workplace discrimination claims are at an all-time high and small business owners feel vulnerable. With a difficult economy and new employment laws making charges and lawsuits more likely, employment practices liability insurance (EPLI) is evolving from a high-priced option to an affordable necessity for smaller companies.

A recent survey of small business owners conducted for Hartford Steam Boiler found that 66 percent were concerned their employees would file an employment-related charge against them. At the same time, a recent industry study indicated that only 1.2 percent of businesses had purchased EPL insurance. Read AA&B’s May feature “No surprises! High unemployment makes the case for EPLI.” This exposure presents an opportunity for agents and brokers to help fill the coverage gap with new packaged EPLI programs that are designed and priced for small businesses.

Discrimination claims at record levels

The risk of an employment claim is real and growing. The U.S. Equal Employment Opportunity Commission (EEOC) reports that discrimination claims reached the second highest level ever in 2009 as more than $376 million was awarded to employees. Continuing a decade-long trend, racial discrimination claims were the most frequently filed, followed by retaliation and gender. The EEOC warned employers it would continue to protect employees with enforcement and litigation.

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