“Are you covered for Sexual Harassment Claims?”

In today’s increasingly complex and litigious environment, even the most conscientious business owners can find themselves in a situation where an employee feels his or her legal rights have been violated.  You make decisions everyday that impact your employees: hiring, compensation, promotions, accommodating disabilities, terminations and more. Each of these can lead to a claim for a wrongful employment practice if not handled correctly.  It can happen in any industry or business size. Even if you are not found liable, the costs to defend an employment practices claim can be financially overwhelming.  Defending your business against an employment practices claim can cost you time, money, and emotional distress.   Some examples provided by Travelers Insurance are listed below:

  • Discrimination  and harassment- $120,000

    The plaintiff, a graphic designer, resigned her employment claiming that she had been subjected to sexual harassment and gender discrimination by two managers. The insured performed a thorough investigation and terminated one of the two managers involved. The evidence collected included a long
    series of sexually explicit emails, jokes and comments  in the workplace. The claimant was making $40,000 per year. Travelers paid $50,000 to defend the case before settling for $70,000.

    Sexual harassment – $95,000

    A receptionist sued the company she worked for, alleging sexual harassment and retaliation. Specifically, she claimed that her supervisor  had sexually harassed her and that, after she complained, she was moved to a less-desirable position and ultimately terminated. Other employees confirmed the supervisor  had a tendency to make inappropriate and lewd remarks. Travelers paid $65,000 to settle the case, but only after paying $30,000 in defense expenses.

    Discrimination – $140,000

    The Equal Employment  Opportunity Commission  (EEOC) filed a civil complaint against the insured on behalf of two former employees. The EEOC found each party’s charge credible. Specifically,the claimants alleged that they were retaliated against and/or demoted  for reporting, protesting and/or objecting to discriminatory treatment. In addition, one claimant alleged her disability was the subject of inappropriate jokes and conversations. Travelers paid $50,000 in legal fees and settled the case for $90,000.

    Discrimination and retaliation- $100,000

    Three certified nursing assistants filed EEOC charges and later a lawsuit alleging harassment, race discrimination, retaliation and wrongful termination in violation of public policy. They alleged that their supervisor had made inappropriate comments  relating to race and that after complaining about the comments  they were terminated. All three claims settled during a mediation
    for a total  of $100,000.

    Unlawful termination – $135,000

    A former employee sued a manufacturer. The plaintiff, an employee of 5 years, claimed that his job was terminated without warning following a vacation and subsequent illness. The plaintiff further claimed he was terminated because the insured disliked minorities. Travelers paid $45,000 in defense fees before settling the case for $90,000.

    Sexual harassment – $70,000

    An applicant sued the owner-operator of a franchised restaurant, alleging that while she was at the establishment, and after completing her application, she was harassed by the employees and managers. The matter was tried  in front  of
    a jury,who found in favor of the insured. Legal fees paid by
    Travelers exceeded $70,000.

If you are interested in protecting your business against Employment Practice Liability claims, give Moran Insurance  a call at 410-544-3422.