Small business owners rattled by employee lawsuits
Nearly 40% of small business owners were hit with lawsuits by employees in 2023, according to a new survey.
Most small business owners report feeling concerned about an employee lawsuit in 2024, according to a recent Counterpart survey.
Nearly 40% of small business owners were hit with lawsuits by employees in 2023, with 23% of that group saying the litigation cost their business more than $250,000.
Now, 59% of small business owners say they are concerned by employee lawsuits.
“As the compliance landscape continues to become more complex, the specter of litigation looms large for many small business owners,” Counterpart said in the survey. “Given the widespread awareness of risk held by the majority of small business owners, many choose to protect their businesses with management liability insurance policies.”
According to the survey, 99% of respondents expressed confidence in their understanding of the business risks associated with managing their employees; 71% said they were very confident their company was adequately insured; and 27% were somewhat confident. Only 2% said they were not confident in their insurance coverage.
Employment Practices Liability Insurance (EPLI) was the most commonly held policy from the survey, with 61% of CEOs and business owners reporting this type of coverage. Meanwhile, 53% of respondents reported having Directors and Officers (D&O) Liability Insurance. Just 5% of small business owners said their company had no management liability insurance.
Other key insights from the survey include:
- 54% of small businesses have a hybrid work model in which workers come to the office at least once a week.
- 75% of small businesses believe remote work improves business performance.
- 23% of small businesses say managing remote workforces was one of the most pressing challenges in the past year.
- 42% of small businesses currently require their team to be at the office five days a week.
- 33% of all small businesses plan to be fully in the office by the end of 2024.
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