Administrative Responsibility Policy can protect you, your directors and officers and employees in the event of a lawsuit. Many experts in the insurance industry call management liability insurance the fourth pillar of business coverage. (The first three businesses cover disruption, fire and public liability.) Unfortunately, management liability insurance is severely underused by many businesses.
One of the reasons many businesses do not have this type of coverage is because they mistakenly believe that management liability insurance is only for large companies. Once your business has started hiring others, handling money for others, or has shareholders and directors, it's time to cover management responsibilities.
Assuming your business is so small that you don't need to cover management responsibilities. Any person or persons who direct a company expose themselves to the hundreds of commands that govern operational protocol. Any wrongdoing can result in lawsuits against the company, its managers and owners.
The area that has seen the most significant increase in litigation is employment practices. This trend is likely to continue as managers, employers and businesses are increasingly being held accountable for their actions in the workplace. For this reason, experts strongly encourage small and large business owners to consider a management liability insurance policy.
Is EPLI expensive?
- Your employer's conduct liability The cost of insurance will depend on a number of factors, including:
- The type of your business
- Number of employees
- History of EPLI claims against you or your company
What's the best way to protect me and my business from litigation over EPLI claims?
It goes without saying that prevention is better than cure. With that in mind, here are some steps you can take to help create an environment where there is no room for litigation against you through employment practices.
- Inform your employees and management team about your company's policies regarding acceptable and unacceptable behaviors. Clearly spell out the consequences of violating these standards and include this information in the employee handbook. If applicable, post these rules in public areas of your business location.
- Teach employees screening methods that will prevent discrimination during the application and interview process.
- Show employees what action they should take in case of violation of various human rights and anti-discrimination laws.
- If an employee complains to management about a breach, be sure to document what your business is doing to help resolve the issue.
The Australian Human Rights Commission has developed a step-by-step guide to help prevent discrimination during the recruitment process. You may find this information useful for you and your managers.
Definitions of key terms
Often, in casual conversation, people use words similar to each other when talking about inappropriate workplace behavior. When dealing with these attitudes on a professional level, it is important to be able to distinguish between sentences. Familiarizing yourself with these terms can help you communicate clearly with employees and co-workers about employment practices.
- Bullying - Although most people liken the term bullying to activity in a school yard, bullying in the workplace is surprisingly common. For legal purposes, the definition of bullying is as follows: Irrational behavior is repeated that results in damage to the victim's mental or physical health or endangers the victim's health.
- Discrimination - When an individual receives less favorable treatment because of an attribute. It could be obvious, it could be a joke at the expense of the person. Or the hidden claim of not being discriminated against still revealing access.
- Harassment - Although harassment can take many forms, the generally accepted definition of harassment is: to treat someone in a way that makes them feel intimidated or humiliated by a particular attribute, such as nationality or sexual orientation. Do This includes behavior that is deliberately threatening or intimidating for the same reasons.
- Sexual Harassment - There are many examples that fall into the category of sexual harassment. These include, but are not limited to:
- goog_950235258Unwanted physical contact
- Sexual questions
- Sexual desires.
- Making comments that have either explicit or basic sexual implications.
- Physical gestures with sexual meaning
- Showing you offensive or unwanted sexual content
- Making sexually charged jokes at your own expense
- Exposing yourself to yourself
- Sexually assaulting you
Often, employers believe that their actions are legitimate and within the limits of existing laws. This is especially true with cases of wrongful dismissal. Although, superficially, the dismissal of employees makes sense in these two case studies, read on to see how the courts ruled in these instances.
Recently, a federal court chose to pay ملازم 614,000 compensation to an employee who was unfairly fired. During the proceedings, the court discovered that the employer had labeled the employee "difficult" and used it as an argument for termination of employment. In this example, if the business in question had a policy of administrative liability protection against this claim.
An employer had to pay a dismissed employee three months' wages when the court upheld the dismissal as unfair. The employer lost the case even though the former employee was late 16 times in six months, could not account for missing money on two occasions, was busy using his mobile device at company time, and occasionally disobeyed.
The court upheld the decision, saying the employee's behavior was disturbing, but it was not a reason for dismissal. The court said that given the deteriorating relationship between the employer and the employee, it is unlikely that the employment would continue for more than three months.
Adequate insurance coverage would help the employer to cover the losses incurred by the former employee.
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Coverage of appropriate administrative liability in which Employment Practice Liability Insurance can easily protect your business in the event of a claim against you. The insurance profession at Grace Insurance can help you understand all the intricacies of this highly useful insurance cover.
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