The State Bar Association of North Dakota Spring 2013 Gavel Magazine | Page 12

WHAT’S IT TO YA? EPLI COVERAGE FOR SMALL AND MID-SIZE LAW FIRMS
by Wendy Inge, Esq., ALPS Risk Manager
practices liability litigation, least of all law firms. Small business employers, looking to their existing commercial general liability or other policies like directors’ and officers’ liability or professional liability policies for relief from defense costs and judgments, may be surprised to find that these claims are typically excluded from coverage. The insurance industry responded with the creation of employment practices liability insurance to specifically address some of these claims, but in the past, these products were often only available to large companies. With the continued increase of EPLI claims affecting businesses of all sizes, the market is finally creating products that are suitable and affordable for small and mid-size businesses. The Risk is Real. EEOC charges for 2010 showed increases in employment practices liability claims across the board. In particular, 2010 marked a record year for the number of discrimination charges. Additionally, 2010 was the first time in which retaliation charges surpassed racial discrimination as the most filed charge. Looking at all charges filed in 2010, the EEOC collected more than $404 million from employers on behalf of employees – the highest annual total ever! And 2011 data continued to show increases in many of the reported categories with just under 100,000 charges filed. According to industry experts, the chance of a business facing an employment claim is much greater than the chance of a business facing a general liability claim. The number of employers that have faced an employee lawsuit within the past 5 years is 6 out of 10. Also, these claims can be costly. The average out-of-court settlement for an employment practices case is about $40,000. If the case goes to court, the average award is $218,000, and nearly 10 percent of these cases can result in an award of mo ?????????????????1????????????????????????????????????????Q???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????%?e???????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????1????????e?%??????1??e???????????????????????????????????????????
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