See How to Protect Your Business From Employee Liability

Sure you know that big companies are faced with a mess of liability issues. But if you are a small business owner, you have quite a risk exposure as well.

Can you answer this important question about commercial enterprises?

What type of insurance claim does the business owner deal with more – employee related, general losses and damages or that which is connected to property issues?

You might be surprised to learn facts indicate that businesses are more likely to confront a claim in regard to employment as opposed to property or general liability. Furthermore, statistics show that forty-one percent of all employment related claims are brought against small businesses that have between fifteen to a hundred workers!

There’s something else you ought to know about employment risk exposure. You are not shielded from associated claims by your general liability policy or by the workers comp plan you have in place. Moreover, directors & officers and errors & omissions insurance plans shield your establishment solely from lawsuits filed by individuals that do not work for you.

What then is the answer to your risk factor?

If you own a business – whether big, small or mid-size – it is essential that you acquire an Employment Practices Insurance policy for protection against employee related claims.

Employment related claims can spell disaster if you do not have an adequate form of insurance.

Insurance Claims that Really Occurred:

– Fifty-four loan officers from a specific mortgage firm filed a claim for over $220,000 in overtime hours that they were not compensated for. A good percentage of those who brought the claim were high earners, getting an annual salary of more than $150,000. The median yearly pay was $15,000. The boss erred by thinking the Fair Labor Standards Act did not pertain to high earners because of an exclusion to the rule for those earning an annual salary of $100,000 or more. What the boss didn’t realize was that high earners must make at least $455 a week to be classified under this exemption. Because his employees missed pay when they did not close on loans, they did not fall in the category.

– Forty-seven tech-assistance employees filed a lawsuit against the bank they worked for because it classed them as non-exempt employees. The bank presented a plan whereby the workers would receive two-years of recompense. The workers rejected the offer and went ahead with the suit. They were then given recompense for three years of overtime hours and a designated amount for liquidated damages as a result of deliberate misclassification. The final payout was more than $172,000.

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