Cannabis Businesses Face a Variety of Employment Practices Risks that Are Complex and Constantly Evolving.
Employment Practices Liability Insurance (EPLI) protects your business from employment related claims involving three major areas of concern:
- Wrongful termination,
- Discrimination (gender, sexual, age) and
Additional exposures include:
- Wrongful discipline or demotion
- Failure to hire or promote
- Libel, slander, defamation of character, or Invasion of privacy
- Wrongful infliction of emotional distress
EPLI typically covers the legal defense fees and settlement costs or damages– in cases where the employer settles, wins, or loses the case.
The U.S. Equal Employment Opportunity Commission (EEOC) provides a variety of statistics to think about as it relates to the frequency and type of EPL claims:
- 80,000 EEOC discrimination charges are filed annually
- The average cost of defending an EPLI case in court is between $200,000 and $300,000
- The average cost to have a meritless claim dismissed is between $10,000 and $15,000
- $700,000 is the average jury award in wrongful termination lawsuits
- $58,000 is the average amount paid on a sexual harassment complaint
- 55 percent of employment claims result in money awards to employees
- The probability of the plaintiff winning an EPLI-related case at trial is 51 percent
- $2.7 million is the average amount of punitive damages awarded in employment cases
As the statistics convey, claims are becoming more common and are costly. Without EPLI coverage, a business is left with incurring the cost of a claim out of your pocket.
Several factors have contributed to increased employment liability claims as employees have greater awareness of their rights:
- The EEOC, the federal administrator of employment practice laws prohibiting discrimination, has simplified the process of filing a charge or claim
- access to information online
- More exposure to high-profile discrimination and harassment cases in the media
While EPLI is not mandatedby state or typical contractual requirements, the coverage is a relevant addition to a comprehensive cannabisinsurance program. Reach-out to NCIS today to discuss EPLI coverage.