I’m sure you know that large companies face a mess of liability issues. But if you are a small business owner, you also have a large risk exposure.
Can you answer this important question about business enterprises?
Which type of insurance claim does the business owner deal with the most: employee-related general loss and damage or property-related?
You may be surprised to learn that the facts indicate that businesses are more likely to face an employment-related claim than property or general liability. Additionally, statistics show that forty-one percent of all employment-related claims are filed against small businesses that have between fifteen and one hundred workers.
There is something else you should know about occupational hazard exposure. You are not protected from associated claims by your general liability policy or by your current workers’ compensation plan. In addition, Directors & Officers and Errors & Omissions insurance plans protect your establishment only from lawsuits brought by people who do not work for you.
What then is the answer to your risk factor?
If you own a business, whether large, small or medium-sized, it is essential that you purchase an employment practices insurance policy to protect yourself against employee-related claims.
Employment related claims can spell disaster if you do not have a proper form of insurance.
Insurance claims that actually occurred:
– Fifty-four loan officers from a specific mortgage firm filed a claim for more than $220,000 in overtime for which they were not compensated. A good percentage of those who filed the lawsuit were high income earners, receiving an annual salary of more than $150,000. The median annual salary was $15,000. The boss was wrong to think that the Fair Labor Standards Act did not apply to high earners because of an exclusion from the rule for those who earn an annual salary of $100,000 or more. What the boss didn’t realize was that high-income earners must earn at least $455 a week to qualify under this exemption. Because their employees stopped paying when they didn’t close on the loans, they didn’t fall into the category.
– Forty-seven help desk employees filed a lawsuit against the bank they worked for because it classified them as non-exempt employees. The bank presented a plan whereby the workers would receive two years of compensation. The workers rejected the offer and went ahead with the lawsuit. They then received an award for three years of overtime and a designated amount of damages as a result of deliberate misclassification. The final payment was over $172,000.
– Thirteen underage employees of a grocery store worked six uninterrupted days and performed what is classified as dangerous work. All of this is prohibited by the Fair Labor Standards Act for employees under the age of eighteen. Thus, the employer was forced to pay more than $52,000 in restitution to the minors.
In all of the above cases, employment practices liability coverage came to the rescue. As a business owner, you can’t afford to be without it!