In the article “Employee-Related Litigation: The New Cause of Bankruptcy,” Partner Mark Horoupian discussed the consequences of employee-related charges to the Equal Employment Opportunity Commission (EEOC) for various types of discrimination. When these charges turn into civil litigation, the future of the defendant company may be at stake. This is particularly true if the defendant does not have Employment Practices Liabilities Insurance (EPLI).
Companies that carry EPLI can rest somewhat easier knowing that they are covered for most liability for which they may be found responsible, and that the insurance company will typically attempt to negotiate a resolution of these actions on their behalf. When companies are working hard to make ends meet, it may be difficult to sell them on an expensive policy when it is something they perceive as unnecessary. Ironically, though, it is exactly this type of business that is the most vulnerable to these types of lawsuits.
