Similar to other lines of insurance, the employment practices liability (EPL) market has hardened. A higher frequency and greater severity of claims in recent years, as well as increased legislative activity at both the state and federal levels, have influenced the change. While most policyholders will experience rate increases, the EPL insurance environment is actually anticipated to improve slightly this year. If your organization operates within riskier states (e.g., California, Illinois, Florida, New York, Texas) or industries (e.g., health care, retail, hospitality, leisure) you may encounter higher rate increases
Developments & Trends to Watch
Most employers have been affected and forced to make workplace changes as a result of COVID-19. These changes have directly influenced a rise in EPL claims. According to Fisher Phillips, nearly 4,000 pandemic-related lawsuits have been filed against employers. Since the initial onset of the pandemic, some of the top COVID-19-related EPL claims include allegations regarding employee leave concerns, remote work options, discrimination related to workplace adjustments, retaliation, wage and hour issues, unsafe work conditions, and vaccine mandates.
Social Movements Various social movements may influence employment litigation and EPL claims in 2022. The #MeToo movement has continued to empower employees to challenge inappropriate workplace conduct. According to the U.S. Equal Employment Opportunity Commission (EEOC), #MeToo has contributed to a 50% rise in sexual harassment lawsuits against employers in the last five years. The Black Lives Matter movement has also extended additional motivation for employees to denounce workplace racial inequities and influenced race-related discrimination and harassment lawsuits. The U.S. Supreme Court recently ruled that Title VII protects gay and transgender employees from discrimination or harassment based on sexual orientation, gender identity and gender expression. LGBTQ employees may be encouraged to hold employers accountable for unfair treatment through EPL claims.
Retaliation occurs when an employer takes inappropriate actions against an employee for exercising their workplace rights. According to the EEOC, retaliation continues to repeatedly reign as the top cause of employment litigation and EPL claims. Over half of all employment charges filed with the EEOC involve retaliation. Employers who react improperly toward workers who utilize their employment rights could encounter increased retaliation-related EPL claims.
Insurance Buyer Tips
- Review your employee handbook and related policies.
- Ensure you have all appropriate procedures in place, including language on discrimination, harassment and retaliation.
- Implement effective sexual harassment prevention, reporting and response measures.
- Document all evaluations, complaints and situations that result in employee terminations.
We’re Here to Help You
Experts predict a 10 to 25% increase in EPL insurance premiums in 2022. Do not worry; you are not in this alone. We are here to help you understand the current EPL market and strategize with risk management opportunities to protect your organization from these risks. If you have more questions about your EPL coverage or the status of the market, connect with a member of our team.