Employment practices liability insurance, which is known as EPLI, is an important coverage for any business with employers, or that is about to hire employees to have because it covers claims related to employment. EPLI policies will cover employees who are both full time and part time, seasonal employees, independent contractors, any former employee of any type as well as potential employees. Employment-related lawsuits are expensive, with defense costs that can be high, and judgments are often over $100,000. These claims are excluded by General Liability policies so a company without this coverage will need to pay these costs out of pocket. Security guard businesses, both large and small, have an exposure to being sued by an employee or a former employee. EPLI coverage used to only be purchased by larger companies but as lawsuits are becoming more commonplace, small companies are finding themselves fighting claims in court and costs add up to defend claims of this nature. Frederick Yohn of MarketStance stated that out of all the companies with 500 employees or more, at least 1/3 carry EPLI insurance. He also stated that for companies with less than 50 employees, less than 4% have coverage. Carriers are seeing a trend in the increase of EPLI claims. The Equal Employment Opportunity Commission (EEOC) reported 2,118 more claims in 2016 than had been reported in 2015. The EPLI market has an expected growth of $2.7 billion by the year 2019. One of the reasons could very well be the increased media coverage of discrimination lawsuits, and a bigger awareness of these types of claims in general. This is bringing an often overlooked coverage to the spotlight. Because of this, more and more companies are purchasing this important coverage. What is Covered by EPLI?  EPLI covers a variety of types of claims that related to the relationship between an employee and the employer. EPLI covers claims that allege there has been an instance of discrimination (religion, color, nationality, age, sex, and race). In 2016 and 2015, the EEOC reported that the top five categories or discrimination claims were retaliation, race, disability, sex, and age. Retaliation claims comprised 46% of the total number of discrimination claims.  That is a staggering number. Other types of EPLI claims include sexual harassment, negligent or malicious evaluation, wrongful termination, wrongful discipline (which is usually closely tied to discrimination), failure to promote, violation of leave laws, breach of employment contract, failure to hire, emotional distress, hostile work environment or willful deprivation of a career opportunity. What about Wage and Hour Laws? Wage and hour laws are another aspect of EPLI claims but not every policy covers them. Wage and hour laws are complicated because of the variety of local, state and federal laws. There are five types of wage and hour claims. The five types are: misclassifying employees (exempt or non-exempt from overtime pay), overtime wages, extra time off, meal breaks, independent contractors vs employees. Security guards are usually paid an hourly wage and depending on how your company schedules shifts and overtime, these claims can be costly to your company to defend unless your EPLI policy covers these claims. Ensuring that you have wage and hour law coverage is necessary for security guard business owners as claims of these types are on the rise. Third Party Claims  For security guards, who are often stationed at various locations and deal with a wide variety of people, third-party claims coverage is important. With a third party claim, the claim or lawsuit comes from somebody who is not an employee, such a client or customer, or somebody else at a client site (such as a customer of the client).  It is easy for somebody to say something without malice, but have it taken the wrong way and it can trigger a lawsuit. With so many employees off-site at other locations, and with a high degree of interaction with the customers of clients, third-party coverage is necessary to have on any EPLI policy for security guard businesses. Another type of third-party claim that is gaining traction is website accessibility lawsuits. These are lawsuits that allege that the ADA requirements for physical locations can be applied to a company’s website. By claiming that a website is not accessible to a disabled person, they can claim that they are being discriminated against. While the number of claims is low, they are being seen more and more, with companies such as Bed, Bath and Beyond and Ace Hardware being named in lawsuits. To prevent this type of claim, companies can provide audible captions on pictures and consider providing audible text for the website content. This is a type of claim that is being watched carefully. How can we Prevent EPLI Claims? One of the best ways to prevent claims is to have clearly written policies in the employee manual regarding discrimination, harassment, and conduct. Employees should sign a copy and return it to their employer. The managing director of MarketStance, Frederick Yohn, has said that when it comes to having written policies regarding discrimination and sexual harassment, only 41% of the companies with over 1,000 employees had a plan or procedures in place. Even a small company needs to have an employee manual that addresses this issue. Your company should have written procedures and guidelines for hiring, promotion, performance reviews, discipline and termination that all managers, supervisors, and owners must consistently follow. Each job position should have a written description of the exact job duties and expectations about the job. This is important for security guard companies because there is a physical aspect of the job. Job postings should clearly list what the physical requirements are. For preventing wage and hour claims, there are a few steps that you can take such as:

• Have a written policy regarding overtime hours and getting approval prior to working overtime
• Comply with all local, state and federal wage laws and rest/meal periods
• Keep employee records including their classification and duties and a written description of their duties that is consistent to their classification

  Preventing claims by having clearly defined job roles and descriptions, following written procedures for discipline, hiring, and termination and documenting everything are all necessary for minimizing the chances of having an EPLI claim. Security companies need to stay protected and their policy should include coverage for third-party claims and wage and hour law claims as well.

The severity and frequency of Workers’ Compensation claims has a direct bearing on the policy premium. The WCIRB uses both of these factors to determine the Xmod, and frequent small claims are a cost driver. Too many claims, or large claim amounts, can result in an XMod that increases the premium.  Having a good claims history can result in an Xmod that reduced the premium. This is an incentive for businesses to provide a safe place of business and to help reduce or prevent claims. As a business, how can you administer claim to keep the claim cost minimized? Many companies do not have any procedures in place for workplace injuries or incidents. Small to medium size businesses often erroneously think that only large businesses need to have incident reporting plans and set procedures. No matter what size business you have, having a plan in place before any injuries occur is how businesses can effectively manage their claims. What are the action steps for a Workers’ Compensation Claim? All injuries, even minor ones, should be reported to the appropriate person. This can be a manager, a supervisor or the owner. An injury reporting plan is your first defense against managing claim severity and frequency. Untreated injuries can turn in to larger claims later, which is why all injuries need to be reported to the appropriate person to be assessed, treated and documented. Your injury reporting plan should clearly define what an injured employee, or other employee, should do if another employee is injured. First aid stations or kits should be easily accessible. It is your duty to provide immediate medical treatment in the event of an injury. If no first aid is required at the time of the injury, the injury still needs to be reported and documented fully for your records. Documentation is vitally important in the management of Workers’ Compensation claims. Not only should the time and nature of the injury be listed, but what the employee was doing at the time of the injury and what factors contributed to it. If possible, document the injury and the area where it happened with photos. In addition to having the employee complete the incident or injury report, any witnesses should also provide their written statement relating to what happened. Statements should be taken as soon as possible and documented fully. This helps not only to provide a clear idea of what happened, but can help protect your business from fraudulent claims. If the injury is severe, or the medical issue is beyond the scope of basic first aid, make sure that the employee is seen by a medical professional. Emergencies should necessitate a call to 911 without delay. If the employee needs to see a doctor, but it does not require an ambulance, have a plan in place to get them to a hospital or clinic. Your injury procedures should include a plan of how to determine the severity and scope of the injury in order to easily determine if 911 should be called or if they employee should be taken to a clinic or emergency room, or if they are okay to take themselves. Some states require that there is a designated doctor for injuries and illnesses that are work related. This information should be posted in a visible area along with the required postings for Workers Compensation that the states require. If the injury requires further attention, the employee needs to specify when they are seen that it is a work related injury when they arrive at the clinic, doctor or emergency room. Usually, the sooner medical help is received, the better the treatment outcome and the claim costs are lower. Delaying getting medical help can increase claim costs in the long run. If an injured employee refuses medical help, make sure that refusal is documented as well. Claims should be reported as soon as possible to your Workers’ Compensation carrier. Prompt reporting helps to mitigate the total cost of the claim. Carriers would like that all claims be reported but with claim frequency having an impact on the Xmod, it is a management call if first aid claims get reported or just documented. If you do not report a minor first aid claim to the Workers’ Compensation carrier, one of your written procedures should be to follow up with the employee and document the follow up. If you do report a first aid claim, make sure that it is reported specifically as a first aid claim. First aid claims are usually closed quickly with only medical costs being reported and paid directly to the clinic. Once you report the claim, give as much information as you have regarding the incident, first aid steps taken and where the employee was treated. All of the incident documentation should be sent along with the first notice of claim. Your Workers’ Compensation policy will have details on claims reporting. What happens after I report a claim? Once you report a claim, you can still take steps to minimize the total claim costs. To minimize time off work employers should have a back to work plan to accommodate injured employees. Light duty (modified duty) programs help lower overall claim costs by eliminating total disability payments. Make sure that the employee is medically cleared for light or modified duty before allowing them back to work. Stay in contact with your employee to stay on top of their progress. You can establish procedures to check in with them weekly, or every few days, to find out how they are doing. Communication is a great tool, and employees should feel like they have an open line of communication with management. The goal is not to pressure them to come back to work, but to make sure they know that they are valued as an employee and their wellbeing matters. Work with them to establish a return to work timeline and what work restrictions to expect when they come back. This will help you create a light duty plan to accommodate their injury or illness. Make sure that they get their medical restrictions in writing so you can have documentation for the file. As with any type of claim, documentation is important. With Workers’ Compensation claims, not only are their immediate medical costs, but they involve reserve amounts that are set aside. By taking steps to minimize injuries, and to immediately handle them, companies can help claims cost be lowered by having clear lines of communication to get their employees back to work, even with light duty. In addition to having an injury reporting plan, it is also recommended to have an accident investigation plan. In the event of an accident, it should be investigated as to what caused, or contributed to the injury, and what steps can be made to prevent it from happening again.