Just as employment litigation has become more prevalent, there has been a corresponding growth in the number of employers who have purchased employment practices liability insurance in order to protect themselves from some of the financial risk of employment litigation. There are pros and cons to purchasing employment practices liability insurance and this chapter will discuss some of the factors that employers should consider in deciding whether to purchase insurance and what type of coverage to purchase. Employers should consider such factors in deciding whether employment practices liability insurance coverage is right for them and what type of coverage to purchase.
Before an employer is able to purchase employment practices liability insurance and before insurance companies will quote premiums to employers, it is common that insurance companies will require that the employer submit information to the insurer regarding its past employment claims history and its employment practices, including handbooks, policies and training. There may also be requirements that employers maintain training programs during the policy period. Employers must be careful, of course, to ensure that all representations to insurers are accurate, as incorrect statements could be...
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