Employment Practices Liability Insurance for Georgia Home Care Agencies
Lawsuits against employers for discrimination, harassment, wrongful termination, retaliation, and wage and hour violations are at an all-time high — and home care agency insurance in Georgia has to account for them.
Here are the Top 5 reasons to buy Employment Practices Liability Insurance:
- Over 40% of EPL claims are against firms with fewer than 100 employees.
- Three of five employers are sued by former employees every year.
- The financial ramifications of not having EPL insurance can be crippling, especially for small firms because they do not have the operating budgets to handle the defense costs, let alone settlements or judgements of an uninsured claim.
- The median compensatory award to plaintiffs is $325,000.
- Employment Practices Liability (EPL) covers not only ACTUAL, but also ALLEGED acts of discrimination, harassment, retaliation, wrongful termination and other similar acts.
Such costs could put you out of business.
Employment law is always changing. Keeping track of new laws and changing regulations is virtually impossible for the average small to midsize business.
Increasingly common are legal actions related to "tangible adverse employment actions", such as layoffs, downsizing, salary freezes, decrease in hours, reduction in benefits, failure to employ or promote, negligent evaluation, and wrongful discipline. It can be difficult for the employer to prevail in an employment practice lawsuit, often because documentation and record-keeping are insufficient.
Many claims come down to he said, she said evidence that is very subjective. Consequently, nearly all claims are settled out-of-court.
The real need for Employment Practice Liability Insurance is the coverage to defend and settle the claim. This gives the Home Care agency owner the ability to protect the business from a claim that would have to be paid out of the company's cash.
Georgia home care agencies carry this exposure more heavily than most employers, because caregiver turnover in the state is high and every departure is a potential claimant. A franchise or independent home care agency running a roster of hourly caregivers across multiple client homes is exactly the profile these claims are brought against.
In order to have the right Employment Practices Liability Insurance (EPLI) coverage for your Home Health business, it's important to understand that there are different parts of an EPLI policy.
- First Party Coverage – this will cover a claim brought by an employee against the employer for an EPLI claim.
- Third Party Coverage – this will cover a claim by a patient or consumer for the actions by a caregiver against the Home Health or Home Care business. For example, a caregiver discriminates against a patient or consumer – In the Home Care business, when on the job caring for patients stress levels can be high, unintentional verbal exchanges can happen that could result in a claim.
- Wage and Hour Defense Coverage – Most Home Care and Home Health businesses compensate their employees on a hourly wage basis. Errors in recording or calculating overtime pay can result in fines, penalties and damage claims.
Wage and hour exposure deserves particular attention in Georgia. Overtime, travel time between client homes, and on-call hours are the three most common sources of a payroll error, and a single miscalculation repeated across a caregiver roster becomes a claim covering every employee on it.
Some Employment Practice Liability policy will offer DEFENSE COVERAGE for Wage and Labor lawsuits. This means that the policy provides for payment of attorney fees, but not for back wages if/when payroll errors were proven.