Today’s workplaces are constantly changing, and the widespread shift to remote work has impacted everyone in significant ways. Although it may not be top-of-mind for employers, an important consideration is the effect of recent workplace changes on Employment Practices Liability Insurance (EPLI).
EPLI protects employers from employment-related claims and lawsuits, as well as EEOC and related actions. Common claims include wrongful termination, discrimination, and harassment. EPLI can offer coverage for both damages and defense costs associated with a claim. Here are three crucial EPLI trends that employers need to be aware of and understand.
#1. Remote Work’s Impact on Harassment and Discrimination Claims
Many employers and insurance companies have realized that while the nature of EPLI claims has not changed, the setting where these claims are happening has shifted. With the rise in video and online chat usage, many employers see harassment or discrimination claims occurring online rather than in person.
A study by Project Include found that during the pandemic, 25 percent of respondents experienced a rise in gender-based harassment, about 10 percent reported an increase in race- and ethnicity-based hostility, and 23 percent of respondents aged 50+ reported age-based harassment or hostility.
Companies and leaders must be prepared to address a possible rise in claims based on new remote work models.
#2. Culture Shifts Leading to Increased Corporate Accountability
With an increased spotlight on discrimination based on race and sex, the pay gap, and other cultural focuses, employees feel more empowered to speak up on their behalf and on behalf of others. An increase in state and federal laws to address these issues will likely impact the number of EPLI claims.
A recent article by SHRM stated that the “average cost for defending and settling employment law cases is $160,000.” For a business of any size, but especially for a small business, legal costs of that magnitude are significant.
For companies without EPLI, employment-related claims or litigation can be extremely costly. With the right coverage in place, businesses can manage possible risks and ensure they have the policies in place to protect their business in the event of a claim.
#3. Workplace Considerations for the Pandemic
Everyone has their own comfort level and safety considerations related to the pandemic. Employers and HR teams were forced to balance employees’ needs with company directives, which sometimes led to a disconnect between employees and management. Some of these challenges led to EPLI claims, often focused on disability-related discrimination.
There was also an uptick in litigation related to vaccine mandates when employees felt that a mandate was too far-reaching and they did not want to comply. In addition, some employees pursued litigation because they didn’t feel their company was taking enough precautions.
According to Emily Loupee, Area Senior Vice President at Gallagher, “We have seen some litigation end up in payouts having to do with vaccine mandates and workplace environment. A lot of this has been OSHA-related, with employees complaining: ‘My company’s forcing me to go back, I don’t think it’s safe, they’re not providing masks to the extent that I need them, they’re not providing a clean environment, or the distancing isn’t there.’ We have seen some of those lawsuits come through.”
What does all this mean for EPLI rates?
If you’re wondering how these shifts might affect your EPLI rates, it depends. Many insurance experts are expecting an increase somewhere between 0% and 10% for EPLI renewals in 2022.
For employers who don’t have many claims in their history, the increase in premiums may be small. However, employers who have new potential exposures (like recent layoffs), could see a more considerable rate increase.
If you’re interested in learning about EPLI options and premiums, reach out to the eSpecialty Insurance team! We’re here to help you find the coverage that’s right for you and your business.