Counting the cost of harassment claims
Defending these types of claim has many hard and soft costs including financial, reputational and legal for all involved.
Like so many other aspects of the industry, legal risks are constantly changing for insurers. Over the last 18 months, one of the areas where claims and legal action have increased significantly involves harassment claims in a number of industries. Defending these types of claims involves many hard and soft costs including financial, reputational and legal for all involved. There are also emotional and personal costs as well.
Investigating these claims takes patience, fairness, honesty and an unbiased approach — no small order considering the range of emotions these types of events can release on both sides. However, bad behavior should never be acceptable on any level or for any reason.
In 2018, the Equal Employment Opportunity Commission was able to recover almost $70 million through litigation and other enforcement actions after 41 cases alleging sexual harassment were filed. That was an increase of almost $23 million over the amount recovered in 2017. The claims are definitely trending in the wrong direction.
When conducting an investigation, it will be important to identify witnesses on both sides of the allegations, gather any pertinent evidence if it exists, and consider other risks or wrongdoing that could be uncovered as part of the investigation, especially if it could lead to additional litigation. Protecting the rights of the accused and the accuser will also be critical.
Investigators must be fair and impartial and understand that there could be pressure from unethical entities that try to circumvent the investigation or offer biased information that doesn’t provide the full scope of the problem or issues within a company. There can only be one set of rules for everyone — power, money and position should not be able to drive the investigation in one direction or another.
For the companies grappling with these issues in the wake of the #MeToo movement, education will be a key component to preventing future incidents, and making employees at every level aware of what is and is not acceptable behavior. At the same time, providing employees with a safe, unbiased and confidential means to report harassment incidents will go a long way to making sure the real truth is uncovered. And finding the truth is really what matters for everyone.
Patricia L. Harman is editor-in-chief of Claims Magazine. Contact her at pharman@alm.com.
See more: