Companies of all sizes and scopes are being targeted in lawsuits, and the cost of defense can be devastating for businesses of any size. Any company that hires employees is at risk, and while prevention is an admirable goal, it is simply not possible to control everything that is said and done within a workplace. Words and actions may be taken out of context or exaggerated by an employee to further substantiate their claim, and it is then incumbent upon the business to engage in the costly and lengthy legal process. Lawsuits may not always be avoided, but businesses are able to find protection through the use of employment practices liability insurance.
Insurance Can Protect Employers in the Event of a Lawsuit
There are a number of issues that may arise in the workplace that may result in an employee seeking legal action against the company, including:
- Breach of contract
- Disciplinary action
- Failure to promote
- Sexual harassment
There are a number of others as well, and each of these represents the possibility of a long and expensive legal battle. Employment practices liability insurance offers coverage in the event that an employee decides to file suit. The insurance coverage often includes the cost of legal defense and court costs, regardless of the outcome of the suit. This type of protection is incredibly important, because the true financial impact caused by a drawn-out legal battle is often difficult to quantify.