Employment Practices Liability Insurance for South Carolina Home Care Agencies
Employee lawsuits over discrimination, harassment, retaliation, wrongful termination, and wage and hour errors have never been more common. Home care agency insurance in South Carolina should be built with that in mind.
Top five reasons to carry Employment Practices Liability Insurance
- Firms with fewer than 100 employees account for over 40% of EPL claims.
- Three in five employers face a lawsuit from a former employee every year.
- An uninsured EPL claim could be financially crippling for a small firm, which often has no operating budget for defense costs, let alone a settlement or judgment.
- Plaintiffs receive a median compensatory award of $325,000.
- Coverage extends to ALLEGED acts as well as ACTUAL ones, including discrimination, harassment, retaliation, and wrongful termination.
Costs like these could close an agency's doors.
Employment law is always moving. Tracking every new law and regulation is nearly impossible for a typical small or midsize business.
A growing share of lawsuits involve "tangible adverse employment actions," such as layoffs, downsizing, pay freezes, cut hours, reduced benefits, decisions not to hire or promote, negligent evaluations, and wrongful discipline. Employers frequently have trouble winning because their documentation and recordkeeping are not strong enough.
Many of these disputes rest on he-said, she-said evidence that is hard to weigh. That is why nearly all of them settle before trial.
The core value of EPLI is coverage to defend the claim and pay a settlement. Without it, the agency owner may have to pay out of the company's own cash.
In South Carolina, home care agencies may carry more of this risk than most employers. Turnover among caregivers can be high, and every departure could become a claim. A franchise or independent home care agency with many hourly caregivers working across client homes matches the profile these claims are often brought against.
Understanding the parts of an EPLI policy
The right EPLI coverage for a home care agency depends on understanding the separate pieces of the policy.
- First-party coverage: covers a claim an employee files against the employer.
- Third-party coverage: covers a claim a client or consumer files against the agency because of something a caregiver did, such as discriminating against that client. Caregiving can be high-stress work, and an unplanned exchange of words could lead to a claim.
- Wage and hour defense coverage: most agencies pay caregivers hourly, and errors in recording time or figuring overtime could bring fines, penalties, and damage claims.
South Carolina agencies should pay special attention to wage and hour risk. Overtime, travel time between clients, and on-call time commonly lead to payroll errors, and a single error repeated across the caregiver roster could turn into a claim on behalf of every employee.
Some EPL policies provide DEFENSE COVERAGE for wage and labor suits. That covers attorney fees, but not back wages if payroll errors are proven.
Frequently Asked Questions
Is EPLI worth it for a small South Carolina agency?
Small agencies are where most claims land. Over 40% of EPL claims target firms with fewer than 100 employees, three in five employers are sued by a former employee each year, and the median compensatory award is $325,000.
What does EPLI protect against?
Actual and alleged discrimination, harassment, retaliation, and wrongful termination. It covers claims from employees (first-party) and from clients or patients (third-party).
Are wage and hour claims covered?
Some policies offer defense coverage for wage and hour suits, which pays attorney fees but not back wages when payroll errors are proven.