General Liability Won't Protect With These Types of Claims
As a New Jersey contractor, if you have employees and don't strongly consider Employment Practices
Liability you may be making a mistake of epic proportion.
Employment practices covers claims like wrongful discharge, wrongful firing, failure to promote,
sexual harassment, slander, invasion of privacy as well as others..
As the economy goes through a downturn, many New Jersey contractors have been forced to downsize.
If an employee decides they were "wrongfully terminated" and pursue legal action against you, you
have to defend it whether or not it has any merit.
The scary parts of this are that these claims are exceedingly expensive to defend, and the plaintiffs
win an alarming amount of the time. As a business owner in a down economy this is not good news.
When I say bad news it is epic bad news:
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The average plaintiff's verdict in employment practices lawsuits exceeds $250,000
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15% of all verdicts are in excess of $1 million
And, even when a contractor is able to successfully defend a claim, the cost to defend generally
exceeds $50,000.
Here is a partial list of torts which have been paid under Employment Practices Liability which
would not have been paid under your Contractors General Liability Policy.
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Constructive Discharge
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Defamation, libel, or slander
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Infliction of emotional distress or mental anguish
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Invasion of Privacy
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Wrongful discipline
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Humiliation
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Wrongful demotion
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Negligent/wrongful evaluation
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Failure to enforce company policies and procedures
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Negligent retention
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Negligent training
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Failure to grant partnership
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Defamatory statements in connection with an employee reference
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Negligent supervision
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Negligent hiring
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Coercion
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Failure to grant tenure
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Wrongful deprivation of a career opportunity
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Employment-related misrepresentation
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Wrongful failure to employ or promote
Most insurance companies do not include this coverage as part of their Contractors General
Liability policy for the aforementioned reasons. While some are starting to provide some
coverage, normally you will find greater coverage under a separate Employment Practices
Liability Insurance Policy.
As a contractor, you may not like the idea of having to pay for this coverage. Even less will
you like having to defend one of these claims on your own.
Unique Risk Exposure That Contractors Face With Employment Practices Liability
Contractor's business is vastly different than other business models. This difference creates
unique exposures due to contractors frequent use of temporary and/or seasonal workers and their
workplace environment.
The main exposures associated with temporary or seasonal workers are verbal, sexual, and
physical harassment. Age and sex discrimination are other sources of claims the contractor
faces in this area.
Second, the workplace environment at a construction site is vastly different than an office or
retail store atmosphere. Often, there is little centralized control or managerial oversight at
a typical job site and often times there is a more lax attitude. Additionally, many supervisors
and managers may not be as aware or sensitive concerning activities that could well produce
allegations.
This is a huge problem, and one that is getting bigger not smaller, and the worse the economy
is the more these claims are going to be presented.
Call us at (908) 730-6443 or
contact us for answers to your New Jersey Employment
Practices Liability Insurance questions.
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