EEOC charges, emploement practices issues - chart

Employment Practices Coverage and Discrimination Suits

If you’re wondering if you have enough employment practices coverages, visit the home page of the U.S. Equal Employment Opportunity Commission’s website where you’ll find a frightening newsfeed that lists scores of employment practices and discrimination suit settlements. If you employ people, and you ever want a good scare, take a gander at the list, which today includes an internal medicine practice that’s paying $22,500 to settle a pregnancy discrimination and retaliation suit, a company in the foodservice industry in Chicago that is settling a disability discrimination suit for $80,000, and a fast food franchise that’s spending $100,000 to settle a pay discrimination lawsuit.

An employee can bring a discrimination suit on any of a dozen categories which include age, disability, equal compensation, harassment, national origin, pregnancy, race, religion, retaliation, sex, sexual harassment and genetic information.

As an employer, you set the standard, and you trust your managers to maintain a high level of professionalism. Many suits against employers are legitimate, and some probably originate from a single bad manager, or a good manager having a really bad day. Whatever the cause, the results can be costly and damaging.

Preventing lawsuits

Of course, your best defense against an employment practices suit is preventing them from happening in the first place. Weather you have an in-house human resources manager, or outsource to a team, it’s important to develop a set of guidelines and train your managers well. Equally important is the ability of your team to listen to employees to hear what’s going on in each department. Often, employees want to be heard and want to feel that leadership is doing something about the problem, so listening and taking positive action may solve the problem and prevent the situation from escalating to the next level.

Additional resources include the Society for Human Resource Management, which devotes an entire section of its site to employment law, and the U.S. Department of Labor’s compliance page, another good resource for answers.

Dealing with lawsuits – employment practices coverage can help

Entering into litigation over an employment suit has obvious financial costs, but your company also takes some hits on reputation – employees gossip, word gets around your industry – and if things get bad enough, the whole suit can take on a life of its own on social media channels.

Your employer’s liability coverage policy may cover you for many of the costs associated with a suit, but depending on the industry you’re in and the number of employees you have, you may want additional coverage – or you may want to be able to cover the costs of your deductibles if you ever face a suit, or a series of unrelated suits, or a class action suit.

Work with your insurance provider to be sure you have plenty of coverage in place. If you’d like to explore the additional options a captive insurance company can provide, please feel free to contact us.

Managing Risk on a Global Level

If you’ve never looked at the U.S. Department of State’s U.S. Passports & International Travel Worldwide Caution report, U.S. Department of State’s U.S. Passports & International Travel Worldwide Caution you should consider giving it a read. Particularly if you are sending staff abroad any time soon, or if you have operations overseas. Warnings about groups that are targeting Westerners, and U.S. citizens in particular, for kidnapping and terrorist attacks are updated regularly.

Managing global risk requires additional planning

kidnapping chart - 1997 - 2012 - Mexico

The Citizen’s Council for Public Security and Criminal Justice (Consejo Ciudadano para la Seguridad Pública y la Justicia Penal, SJP) in Mexico reports that kidnappings there are on the rise.

Growing businesses are always looking for new vendors, manufacturing facilities, or markets and this means key salespeople and executives may be dispatched to locations around the globe. A time of growth is exciting and optimistic, but it is important to keep safety in mind before you send employees out of the country. Mexico, for instance, reports that kidnappings are on the rise.

The State Department maintains an A-Z guide for Americans Travelling Abroad. One tip: Make a photocopy of all of your identification and passports prior to leaving. Another helpful tip: Make sure you’ve notified your credit card companies that you’ll be traveling and let them know what your destination is – credit card companies have updated security measures that automatically detect out-of-the-ordinary transactions and your card could be placed on hold just as you’re handing over your AMEX for that dinner party you’re hosting in Barcelona.

Also check with your insurance company before you say bon voyage to any staff. You want to be sure that they are protected for everything from health emergencies to more serious issues like kidnapping.

If you’re making plans to open an office or facility overseas, you’ll need to do your homework. From working with the appropriate U.S. consulate to calling on your legal and operations teams, you’ll want to be sure your business is set up for success.

Think globally

Even if these trips or offices are very small, take the time to make sure you’re covered for anything. The cost of a catastrophe to your company could be huge if there is loss of property and immeasurable if one of your employees is harmed. If you feel your coverage isn’t adequate to cover everything you’re being advised to cover – or if the coverage you want isn’t offered, consider creating a captive, which could help you get the insurance you need as your business grows overseas, and can grow with you as your international operations reach the “global” level. Contact us if we can help.

managing risk

Managing the risks you take

Talk to a small business owner just starting out or a senior executive at a flourishing company and both will tell you that risk is the essential ingredient to success. It is the element that keeps businesses in front of their competition and the main spark for innovations that change the marketplace.

Seasoned mavericks know that the key to successful risk taking is evaluating risks and making sound business decisions on how to deal with them. That’s where risk management comes in.

Insurance helps with managing risks

Risk management is the art of looking at potential threats to your business and deciding how to deal with them. Options may range from reducing risk through prevention, limiting potential exposure to threats, or implementing controls against perceived threats. But even the most carefully planned businesses can be blindsided at times.

Traditional insurance policies help companies by providing indemnification – or compensation for loss and damages when something goes wrong. Insurance places the insured in a large pool that can reduce the impact of the loss – the Law of Large Numbers at work.

Some businesses, however, find that they need to insure risks that may not be covered in traditional insurance plans. These businesses can form a captive insurance company to formalize self-insured risks and share the potential burden with businesses who face potential issues similar to their own.

Benefits of Captives

By identifying and insuring potential hazards that could have damaging impact – think of a huge explosion that impacts a large community, or the kidnapping of a key executive – the company is protecting itself. The insured events are remote possibilities, and if the loss never occurs, the premiums paid to cover them generate higher profits over time.

Captives offer benefits like cost reduction, more control over settlements, leverage against third-party insurers, and the ability to establish better-than average claim experience. Companies also find captives are a good way to manage cash flow and protect assets.

Increasing certainty

There is no doubt that a sense of bravado and the willingness to explore new frontiers drives business forward. Being prepared for almost everything on the road ahead will help you maintain your lead.