CIGNA Property & Casualty has introduced a broad Employment-related Practices Liability Insurance (EPLI) policy with a Workplace Violence coverage option to give small businesses added protection as the legal relationship between employers and employees continues to evolve.
"Most companies with fewer than 1,000 employees think that they won't be hit by an employment related lawsuit," says Robert J. Groff, vice president, CIGNA Commercial Insurance Services. "They believe their policies, procedures and training will protect them. Even if they are hit with a lawsuit, they feel their Commercial General Liability (CGL) policy will protect them. The problem is that their CGL policy language may exclude EPLI claims. And the best preventative measures will not protect against the high cost of fighting even a nuisance claim. Taking a wrongful termination case to trial could cost $200,000 to defend.
"In addition, workplace violence is on the rise and it threatens a company on a number of fronts," Groff says. "There is a financial impact when an employee is injured in a workplace violence incident and an impact on the company's internal and external image," Groff adds. "Our Workplace Violence coverage helps a company regain productivity following an incident and repair its public image."
The new policy has two separate components:
- The Employment-related Practices Liability portion covers the company, its directors, officers and employees if a wrongful act claim is made by or on behalf of a current, former or prospective employee. The broad definition of a "wrongful act" includes violations of employment statutes, as well as many common-law allegations for such things as defamation, invasions of privacy, and wrongful infliction of emotional distress. The claims-made policy covers prior acts (there is no retroactive date), punitive damages (where permitted by law) and does not have exclusions for strikes, lockouts, plant closings, downsizing or retaliatory actions. Policy limits are available from $500,000 to $5 million.
- The Workplace Violence insurancewhich is available as an option; but if desired, it must be purchased in conjunction with the basic EPLI policyprovides coverage for loss of business income and for public relations expenses associated with maintaining a company's image and status after a workplace violence incident. The policy also covers additional expenses such as the salary for a workplace violence victim who is unable to work, the salary of temporary employee(s), rewards to informants, temporary security measures, rest and recovery, and coverage for an immediate response by Pinkerton, Inc., a security firm contracted by CIGNA Property & Casualty to assist employers in recovering quickly from a workplace violence event. Policy limits are available from $250,000 to $5 million.
In addition to the coverage, companies will also have access to loss control resources, such as:
- an employer help line
- newsletters/legal updates
- access to a logon-secured web site with sample policies and procedures that reflect the current employment-related legislative environment; and
- human resources policies and procedures audits.
"We provide access to policies and procedures to help companies prevent as many claims as they can and to help in defending against an allegation of wrongdoing," says Groff. "But no company does everything right all the time, especially in this age of evolving legislation. You're dealing with a moving target as the government and the courts keep changing the rules. The threat of costly and damaging lawsuits far outweighs even the best efforts to prevent abuses"
The policies are available to firms with fewer than 1,000 employees.