PHIL’S CORNER: Employment Practices Liability Insurance, Even for Solos & Small Firms
Did you know employment practices liability coverage (EPL) can be added to your lawyers professional liability (LPL) policy? Have you seriously considered it from a cost/benefit standpoint? The answer is obviously yes if your firm has added it, as about 47% of our insured firms have. If not, is it because you are uncertain about what it covers and the underlying exposure?
In 2020, the EEOC received approximately 70,000 discrimination claims against employers. In 55% of those claims, allegations of retaliation were involved.
Stop and think for a minute about the changing workplace environment. Work from home options, returning to the office, to vax or not to vax. With law firms, there are often other exposures more unique, such as when does someone make partner, overtime pay for staff. There are also the normal things, like discrimination, wrongful termination and harassment. Without a doubt, we all face an increasingly dynamic employment liability environment.
Your OAMIC EPL endorsement covers wrongful or inappropriate employment conduct from an insured’s decision to hire, fire, promote or demote. This includes discrimination or harassment by an insured against an employee and also extends to third parties (i.e., clients and vendors), which means there is value for sole practitioners with no employees. Like any claim, even if allegations are meritless, they still must be defended and usually the cost to do so is many times greater than the cost of several years of premium for coverage.
The last issue is one of the first I mentioned, the cost/benefit analysis. You might well ask, “Do I need the coverage?” I would say yes, because a claim in this area without coverage can be very difficult financially, especially for a small- to mid-size firm. If you follow that up by asking, “But how badly do we need it?” I will say not nearly as much as your professional liability coverage, but at such a low annual cost it’s well worth the expense.
Like any form of insurance, it is a transfer of risk, and usually the cost involved has a little bit to do with how badly we want to transfer all or some of that risk. In this case, you will be shocked at how little the standard limits and deductible cost per attorney. Let’s just say, it is probably much less than a client dinner and maybe even less than a client lunch.
Feel free to give me a call at 405-471-5380 or email me if you would like to discuss coverage and cost in more detail.