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Home > Blog > Sooo…..Your salesman, Diane, just came into your office and accused Bob of Sexual Harassment…..What Now?
FRIDAY, JANUARY 8, 2016

Sooo…..Your salesman, Diane, just came into your office and accused Bob of Sexual Harassment…..What Now?

sexual harrassment

Sooo….You just had to ask one of your salesmen to clean out his desk. You had received a written claim of some sexual indiscretions claimed by a fellow female sales person.  The texts and verbal abuses were claimed to have been made over a 12 month period. 

Now what?  Did you do your due diligence in investigating the claims?  Will you hear from an attorney?  Either party may sue you since it supposedly happened on company time in the office.  Will my business insurance respond to protect my company and me?  This type of business professional legal liability situation falls under the heading of Employment Practices Liability.

Employment Practices Liability Insurance (EPLI) offers broad policy coverage for discrimination, harassment, and inappropriate employment conduct, including hostile work environment, failure to hire or promote, wrongful demotion, negligent evaluation, deprivation of career opportunity, retaliation, wrongful discipline, libel, slander, defamation of character, and invasion of privacy.

Whether you and your company are at fault or not, the legal fees could bankrupt your company. Even an organization with good human resources policies and procedures in place can be sued, and the cost of defending a claim can be enormous. It is not uncommon for legal fees associated with winning an employment lawsuit to exceed $250,000.

Here are some examples of real life claims. See if you can relate to any of these claims.

  • Sexual harassment and discrimination — $775,000+

A former employee of the insured claimed she was subject to sexual harassment, discrimination and retaliation. After complaining to human resources that her manager had verbally harassed her on a number of occasions and had touched her inappropriately on two or three occasions, the plaintiff claimed she was retaliated against and terminated. She sued for sexual harassment, retaliation, wrongful termination in violation of public policy, intentional infliction of emotional distress, negligent infliction of emotional distress and tortious assault. Travelers paid more than $225,000 to defend the claim and paid $550,000 in settlement costs.

  • Sexual harassment and discrimination — $450,000

A line worker at a bulk food packaging business filed a charge against his employer with the Equal Employment Opportunity Commission for sexual harassment and discrimination. The charge developed into a class-action suit brought against the insured directly by the Equal Employment and Opportunity Commission. The suit contended that the insured had a pattern and practice of failing to respond to claims of harassment and discrimination. Travelers settled the case for $350,000 after paying more than $100,000 in legal fees.

  • Sexual harassment and assault — $350,000

An applicant sued the owner-operator of a franchised bar and grill, alleging that while she was at the restaurant, and after completing her application, she was harassed, drugged, assaulted and sexually attacked by the employees and managers of the restaurant. Further investigation of the matter showed that after drinking for several hours, the plaintiff decided to apply for a position and that she was the instigator of the sexual activity that occurred. The matter was tried in front of a jury, who found in favor of the insured. Legal fees paid by Travelers exceeded $350,000.*

  • Discrimination and retaliation — $250,000+

The president of a small advertising agency sued the agency for sex discrimination, age discrimination and retaliation. The plaintiff alleged that she and the agency’s CEO engaged in a consensual affair. After the CEO passed away, his widow became Chairperson of the Board. The plaintiff claimed she was wrongfully terminated when the affair was discovered after the CEO’s death. The insured contended there were performance and trust issues associated with the plaintiff’s employment at the agency. The insured prevailed on summary adjudication, but more than $250,000 was paid by Travelers defending the case and subsequent appeal.

  • Discrimination and retaliation – $1,370,000

The head of Human Resources for a hospital system, who was a 64-year-old, was terminated by the plaintiff’s 45 year old boss after findings from an outside consultant revealed that the individual created a threatening, demoralizing and dysfunctional work environment which was not acceptable for a person in that position. The former employee of +20 years filed a lawsuit alleging age discrimination and retaliatory termination for complaining about certain business practices. The case was resolved for a total of $1.15m during mediation. Defense expenses incurred were an additional $220,000.

  • Discrimination and harassment — $287,500

In 2004, the plaintiff, a graphic designer hired in 2001, resigned her employment claiming that she had been subjected to sexual harassment and gender discrimination. Specifically, she named four managers/directors of the insured as wrongdoers. The insured performed a thorough investigation and terminated three of the four people involved. The evidence collected included a long series of sexually explicit emails, jokes and comments in the workplace. The claimant was making $45,000 per year. Travelers paid $50,000 to defend the case before settling for $237,500.

Even small companies have this liability exposure. Protect your company.  ELPI coverage is available as a stand alone policy or as an endorsement to a Comprehensive General Liability Policy (CGL).  The premiums are reasonable.

Learn more………Things Employers Wish They Had Never Said

Call SWFL Insurance Agency at 239-265-9577 for a discussion of your exposures and a premium quote. You can also email us at joshw@SWFLAgency.com. 

Posted 3:00 AM

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