Employment Related Practices Insurance Protects Against More Than Just Just Errors

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During an era when lawsuits are filed for the most frivolous of reasons and large settlements result, anyone engaged in business needs a proper level of liability protection to ensure no financial harm will befall him or her and the employer can continue providing goods and services. Employment practices liability insurance is a fairly new product that ensures lawsuits will not put an end to the hard work someone put in the make a better life for his or her family as well as those depending on their jobs.

Federal statistics show about 60 percent of firms face a lawsuit at least once during its existence. And employment related practices insurance policies help protect against potential legal judgments arising from almost any kind of lawsuit, even ones for which the policyholder is not at fault. If a worker commits a tortious offense, such as sexual harassment, and the business is sued in court, that would be covered by the policy. Or if some error were to be committed while compiling paperwork for an important and costly transaction, the cost of defending a lawsuit arising from the error and any settlements or court judgments would have paid up to policy limits.

While perils for job providers can be protected include wrongful termination, discrimination, errors and omissions, sexual harassment - whether or not the job provider is involved, disputes regarding wages or hours worked, and other claims, such as libel, slander or defamation. Also covered are lawssuits arising from invasions of privacy, assault and battery, emotional distress, negligence, or retaliation against a "whistleblower" who may have reported the job provider for an illegal or unethical business practice.

While there are fairly broad levels of coverage provided with employment related practices insurance, exclusions do apply. In general, such policies will not apply when other types of insurance plans already are in place, such as property damage or bodily injury claims due to their coverage under general liability policies for commercial enterprises. And any intentional acts will not be covered, such as committing a crime or assaulting another person, or any punitive damages that might arise from a lawsuit.

Because the cost of defending a possible legal challenge and resulting judgment against a job provider can be very high, insurers reserve the right to demand a settlement be made when possible for a specified amount. If the job provider refuses, the insurer can invoke the "hammer" clause and refinance coverage for any costs if the case is lost.

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Source by Mike Heuer