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What Happens If I’m Sued By An Employee?

Without EPLI coverage, your business is exposed to huge lawsuits. I know, I know, I’ve heard it a million times from business owners: “We’re like a family here”, “that wouldn’t happen in our office”, “we’ve been working together for years”. But that way of thinking, that complacency, is exactly why employment-related claims are at an all time high. and why the need to insure one’s business for that situation has become a necessity in today’s highly litigious work environment. Almost 75% of all litigation against corporations today involves employment disputes.

What Is EPLI Coverage?

An Employment Practices Liability Insurance (“EPLI“) policy, sometimes called a Management Liability policy, will protect your firm from claims arising out of actual or alleged wrongful practices relative to hiring/firing, promoting/demoting, sexual harassment, discrimination, wrongful termination, failure to make partner, and a multitude of other workplace related forms of first and third-party claims. Many employers are not aware that their general liability, professional liability or workers’ compensation policies DO NOT protect them in these situations when being sued by employee.

CURRENT EPLI CLAIM TRENDS:

Recent statistics show businesses are far more likely to face an employment-related claim than a property or general liability claim. STOP AND THINK ABOUT THAT FOR A SECOND: you are far more likely to face a lawsuit from an employee than you are of having a fire or a theft or a slip and fall YET almost everyone buys coverage for the fires and for the injuries while much fewer buy coverage protecting against employment-related claims. I expect the trend will continue and soon all types of businesses will have (or may be required to have) an EPLI policy to protect them if sued by an employee. When these workplace issues turn into lawsuits, they become a constant strain and drain on time and resources.

Claims involving lawsuits by employees comprise a significant amount of today’s civil litigation. No organization is immune from employment practices liability litigation, least of all law firms. Not only are the number of employment-related claims increasing, but so is the potential financial risk to your business. The Equal Employment Opportunity Commission reports that employee complaints have escalated to nearly 100,000 new charges per year.

Defending a sexual harassment or discrimination claim, whether you are innocent or guilty, or even if the claim is groundless or fraudulent, can be massively expensive. You can be sued by an employee even if you’ve done nothing wrong, you’ll still need to hire an attorney to get you out of it — this can cost thousands and thousands of dollars.

What Is Third-Party EPLI Coverage?

Many EPLI policies also include what is known as “Third Party Liability” which covers liability claims brought by non-employees against employees of the insured company. The third-party in these lawsuits can be a customer, a client, a vendor, the mailman or anyone who interacts with your employees. Your organization’s third-party liability exposure is driven largely by the degree to which you and your employees interact with the general public.

What Should You Do Next?

Call Paragon at 248-851-3066  OR  request a quote below and we’ll reach out to you ASAP!

Please call Paragon at 248-851-3066 with any questions or concerns, we’re here to help!

I’m pretty confident that if you asked anyone who has ever owned a rental property you would get an overwhelming response that it’s not as lucrative or easy as they thought it would be. In fact, owning a rental property can be a major pain, and end up costing you a ton of money!

I certainly don’t mean to be a “Debbie Downer”, and I know that if it’s done right it can be lucrative, but from an insurance agent’s perspective, I don’t see a lot of people doing it right.

So you’re probably thinking, “Well Chris, you are an insurance agent. What do you know about real estate or rental properties? Why should I take advice from you?”

I’m not a real estate agent, and I don’t own a rental property. However, several of my friends/family/clients/co-workers own rentals, and because I insure a bunch of their properties, I’ve had a first hand account of the process, and I’ve learned what to do, and what not to do.

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I was recently asked this question by one of our Paragon Underwriters clients, and thought I would share the answer here for our readers.

There are a lot of things that go into homeowners and auto insurance rates, one of them being credit. I’ve heard a lot of complaints from people who don’t like the fact that insurance companies use credit in their underwriting.

Some people have absolutely no idea that it’s used in the rate at all.

At the end of the day, there’s not much we can do about it though. Insurance companies have been using credit in their rates for decades, and that’s not likely to change.

By the way, insurance companies don’t pull your credit like a mortgage company or credit card company does. There is no negative impact on your credit as a result of an insurance company looking at it.

When I say “pull” what I mean is that the insurance company is doing what’s called a soft inquiry, which is not the same thing as having your credit pulled (hard inquiry).

When does credit play a role in insurance rates?
It’s important to understand that insurance companies don’t continuously check or monitor your credit. Usually, they only check it when you first get a quote and/or sign up with them in the very beginning.

This means that if your credit score increases (or decreases) your insurance company does not automatically know about it.

So, to my customers question of whether or not his increased credit score will lower his rates, the answer is not automatically.

What has to be done on our side as the agent is contact the carrier the insurance and ask them to do what’s commonly referred to as a “re-score”. This is when the insurance company can re-run the person’s credit (soft inquiry) to see if there is any positive bearing on the rate.

This isn’t something that the insurance company is going to let the agency do every single year, so it’s not worth even asking unless there has been a significant change in your credit score, and only you as the customer would know if that was the case.

If you’d like to get a better handle on your credit rating, it could be helpful to setup credit monitoring. We hope this was helpful! As always, leave us comment below if you have any questions.

Why do my auto insurance rates keep going up even though my car is getting older?  At Paragon Underwriters, many of our clients ask this question so I would like to address it from a couple of angles.

First things first, even though it’s called car/auto insurance, it covers more than just your car. It should technically be called “auto-owners” insurance, similarly to how home insurance is actually called “home owners insurance”.

It’s important to understand that there are a lot of variables that go into insurance premiums, and with auto insurance, it’s no different.

The insurance company is much more concerned with you crashing into someone and causing them (or yourself) bodily harm, or death, than they are about your car. A car is a material possession which can be replaced.

A human life is not.

When is the last time you looked at your auto insurance policy?
If you look at it you’ll notice there are a lot of different coverages on your auto policy.

Bodily injury
Property damage
Un-insured motorist
Under-insured motorist
Medical Payments
Loss of Income
Funeral Expense
Loss of use
Rental Reimbursement

These are all things that you are covered for on your auto policy. How many of them have to do with your car?

None.

How many of them have a price next to them on your policy?

All of them.

Your car isn’t the only thing you’re being charged for on your policy
That’s because auto insurance covers far more important things than your car as mentioned above.

Let me re-phrase that: your car insurance rate isn’t just based on your car.

You’re not the only one…
It’s also important to understand that you are not the only person your insurance company insures. You are one fish in an ocean of other fish, sharks, and sea creatures, all who have different characteristics and risk profiles.

Insurance is all about spreading costs over a large number (risk pool) of people, which each person paying their fare share. That risk pool is constantly changing, and is impacted by a ton of different things, including the overall economic climate.

This means that you are sharing in the cost of millions of other people, many of whom may have poor loss history and/or credit.

That’s what insurance is though — sharing in the cost.

The next time your auto insurance rates go up, take a look at the big picture. Make sure you’re looking at ALL of the coverages, and corresponding rates.

Hope this helps!  If you would like to know more about Car Insurance be sure to visit our page dedicated to it.