Protection for the Business Owner

If you are an employer, then one of the risks inherent to you is the risk of a claim or lawsuit brought by one of your employees.  All it takes is for a disgruntled employee to talk to a lawyer and you could be required to defend yourself, at a significant cost, regardless of whether or not you did anything wrong.

Statistics show that employee claims are increasing and that the small business owner is the biggest target.

To help protect you from this risk, insurance companies now offer Employment Practices Liability Insurance or EPL Insurance.  This insurance is designed to cover an employer from claims of: wrongful termination, sexual harassment, discrimination and third party discrimination. In some policies, designed specifically for healthcare professionals, it can cover allegations of patient molestation or violations of Fair Labor Standards Act (FLSA).

As part of the application process, the applicant must disclose any fact, circumstance or situation that may result in a claim, so this insurance must be in place before an act is committed.

The coverage and cost of policies varies; if you shop around you should be able to find a policy with a relatively low deductible (under $3,000). However, some policies may have high deductibles ($10,000 and higher). Compare the policy coverage to make sure you are getting the best product for your money.

In addition to this insurance, make sure you know what you can and cannot do as an employer.  Seek advice and counsel from a professional before you take action against an employee. Make sure you have a policy manual and that your actions follow what the manual says.

The risk of these claims is real. It does not matter if you have a small office and it does not matter if you have done anything wrong.  It could easily cost you thousands of dollars just to make a fictitious claim go away.

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