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Protect Your Employer Risks in 2012

Employers need to manage a world of ever-changing risks, including compliance with federal, state and local human resource laws and regulations, and protecting themselves from mistakes made by directors, officers, other managerial staff or by the company itself.

To protect your company’s best interests, make sure you have the appropriate amount and mix of risk transfer through Directors and Officers (D&O), Errors and Omissions (E&O), and Employment Practices Liability Insurance (EPLI) coverage. All of these policies protect the business owner from risks that come with having employees, but each has its own unique purpose that you should be aware of.

D&O provides coverage for negligent acts, omissions or misleading statements committed by directors and officers of a company that result in lawsuits being filed against the company.

E&O coverage protects people that give advice, prepare design solutions, make educated recommendations or represent the needs of others. It protects these people when they’ve done something they shouldn’t have (error) or when they neglected to do something they should have (omission).

EPLI policies protect an employer’s risks from some of the most common employment-related lawsuits, including sexual harassment, breach of employment contract, wrongful termination, discrimination and failure to hire or promote. A survey of HR executives and in-house lawyers revealed that likely three out of five employers will be sued by a prospective, current or former employee while they are in business. Defending against a lawsuit like this is costly and time-consuming, even if the claims are groundless.

To best assess which coverages and how much of each you need as part of your business owner’s policy, it’s important to evaluate your risk as it relates uniquely to your company. Consider what type of industry you operate in, the size of your business and the makeup of your organization (risk can increase if you have shareholders). Warren G. Bender Co can help you evaluate these factors and decide on the best plan of action for your organization.

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