#MeToo Movement and Its Impact on Business Owners: What You Need to Know to Protect Yourself

According to a new report on sexual harassment released by the Equal Employment Opportunity Commission (EEOC), data for fiscal year 2018 shows a more than 50 percent increase in sexual harassment lawsuits filed by the agency, and a more than 12 percent increase in the number of charges it received over fiscal year 2017. The EEOC also reported that hits on its sexual harassment web page doubled over the last year! It should come as no surprise to you that the EEOC’s 2018 fiscal year coincided with the start of the #MeToo Movement.

What may come as a surprise is the fact that the average cost to defend an Employment Practices lawsuit is $150,000, while the average cost of settlement is $200,000. The cost to employers for an employment practices claim includes defense costs and payment of damages, and a practice must defend itself whether or not there is merit in a lawsuit. In fact, it can cost thousands of dollars to simply respond to an EEOC charge without any lawsuit. Employment Practices Liability Insurance (EPLI) will easily pay for itself if you are sued even once.

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EPLI is insurance that protects you against employee claims alleging wrongful termination, sexual harassment, and discrimination. Most employers don’t realize that EPLI can be extended to cover claims made by third parties, such as vendors or employees at a hospital. You can also add wage and hour coverage that will protect you from employees alleging they did not get breaks, time off, or overtime pay.

The cost of an EPLI policy is a fraction of what you would pay if you end up on the losing side in a lawsuit. EPLI premiums will vary depending on a number of factors:

  • Number of employees
  • Amount of coverage purchased
  • Whether your company has anti-discrimination and anti-harassment human resources policies in place
  • Whether your company has had any EEOC complaints or lawsuits filed against it in the past

As a CAP member, you do have the Employment Practices benefit* of $50,000 in defense costs reimbursement only, however unless you have an Employment Practices Insurance policy, your business is not covered against employee additional cost of a lawsuit and potential settlements. According to an industry study, six out of 10 non-buyers of EPLI coverage mistakenly think they are protected by other forms of insurance.

You owe it to yourself and your practice to get a quote. We at the CAP Agency stand ready to help you protect your practice. Contact us at 800-819-0061 or email us at CAPAgency@CAPphysicians.com for more information.

Note: The above is for informational purposes only and does not guarantee coverage, nor does it fully outline individual policy terms, including but not limited to coverage exclusions.