Your Employee’s Actions Can Expose Your Business to Major Liabilities

One of three vital steps to protect your medical practice from the very common exposure of an employment related lawsuit is to have Employment Practices Liability Insurance or EPLI. As an employer, you are responsible for not only your own interactions and compliance with employment law, but for everything employees do with the public and each other. I recommend having at least $1 million in coverage in this area, as legal defense costs alone can be six figures, as are many awards.

EPLI covers wrongful acts of employees as well as claims of wrongful termination, sexual harassment or discrimination. But it doesn’t stop there. The list includes, but is not limited to: defamation of character, privacy breaches, being passed over for a promotion or even the lack of an employee evaluation. Evaluation can actually be defined on broader terms by being deprived of a career opportunity. One of the largest exposures could be the breach of the employment contract. It could include human resources where the management of employee benefits was poorly overseen. Most EPLI policies will cover legal costs whether the employer wins the suit or not. But it generally doesn’t cover civil or criminal fine assessments or punitive damages.

Being proactive can build a solid foundation that can support you in arbitration or legal lawsuits. Develop fair hiring standards that promote equality and yet maintain a screening process as part of the recruitment procedures. For existing employees, behavioral expectations should be spelled out in the employee handbook and posted throughout the office to bring attention to the office policy and protocols. Documenting every event can go a long way in supporting a dispute between employer and employee, so keep meticulous notes on your interactions in the office. You can be firm about your office rules if they’re clear, fair and impartial to all employees.

The content in this press release was taken from Ike Devji’s article Common Flaws of Asset Protection Planning, with permission.