Trends to Watch for Employment Practices Liability Insurance:
- Increased litigation—While litigation for workplace harassment fell slightly in 2019 as compared
to 2018, overall levels of litigation for workplace claims are still at near-record highs. Additional
trends, such as an aging workforce, could further the volume of legal actions filed against employers.
- State-level activity—In 2019, more than 20 states passed laws that expand employer liability
related to workplace incidents. Among other requirements, these new laws expanded
protections for victims of workplace harassment, created new training requirements for
employers related to sexual harassment, extended statutes of limitation and limited the use of
nondisclosure agreements. This trend is likely to continue for the foreseeable future as additional states consider similar measures.
- Wage and hour enforcement—In 2019, we saw record levels of Department of Labor
enforcement for wage and hour violations. While EPL policies often exclude coverage for wage
and hour violations, standalone policies are available and may be appropriate for some larger
companies. Beyond insurance, employers should pay close attention to wage and hour rules on
a state, federal and local level.
- Gig workers—In what’s referred to as a gig economy, employers are relying on independent
contractors and freelancers more than ever before. And while this reduces payroll costs and tax liabilities, it can also increase the risk of misclassification claims. Moving forward, it’s likely many
states will adjust their laws to discourage and prevent employee misclassification. What’s more,
additional states may consider laws like California’s Assembly Bill 5, which makes it easier for
independent contractors to claim employee status.
- Possible COVID-19 fallout—Covid-19 has introduced a host of workplace issues that employers must consider. It’s yet to be seen if the fallout from the COVID-19 pandemic will lead to an uptick in lawsuits being filed against employers for issues related to wrongful termination or breaches of privacy.
2020 Price Prediction for Employment Practices Liability Insurance:
- Certain States & Industries: +5% to +25% (CA will be 10-20% with reduced coverage options)
- Overall: +5% to +15%
Tips for Employment Practices Liability Insurance Buyers:
- Review your employee handbook and related policies. Ensure you have all appropriate policies
in place, including language on discrimination, harassment and retaliation.
- Ensure you are compliant with any recent developments that affect how you manage your
workforce or create additional employment practices liability.
- Investigate all claims of discrimination and harassment immediately, and administer discipline
and training as necessary.
- Document all evaluations, employee complaints and situations that lead to employee
- Pay particular attention to issues that could lead to wage and hour complaints.