California Ranks High In Probability Of Litigation On average, a business in the U.S. has about a 12% chance of being involved in an employment lawsuit. California has very aggressive employment and discrimination laws that increase the chances of litigation for businesses operating in our state. In California employers have a 40% chance of being sued by an employee according to the latest statistics by the EEOC.
Employment Liability Facts Any worker who feels they have been discriminated against by their employer can go to the U.S. Equal Employment Opportunity Commission (EEOC) or the equivalent state fairness agency. The average days in litigation is 285 and 20% of these get settled prior to any court proceeding. The average cost per incident (out of court) in 2015 was $125,00 according to the EEOC. The average court settlement runs about $225,000 with 20% or more averaging $500,000 or more.
The national average for total costs of claims that resulted in a defense and settlement payout is $125,000. Without Employment Practices Liability insurance, these companies would have had to pay an additional $90,000. Source PC360.com
California Laws That Impact Employment Litigation
Employers Are Regulated By Statute In Performing Certain Actions, Including:
Anti-discrimination/fair employment practices
Criminal background checks
Here Is Where California Ranks (chance of being sued)
New Mexico 66%
Washington DC 65%
Develop Strong Anti-Discrimination and Employment Policies
Conduct harassment training
Develop discipline procedures
Make sure all supervisors and managers are trained on all policies
Evaluate employee performance annually
Have written job descriptions
Have a clear anti-discrimination policy
Develop clear employee conduct, attendance and punctuality policies
Know what the law requires you to offer and manage
Employment Practices Liability Insurance
An Employment Practices Liability Insurance (EPLI) policy provides insurance against claims and lawsuits brought against an employer, its officers, directors, employees and managers. An EPLI policy will defend the organization and pay the damages awarded under the terms, conditions, and limits of the policy. A very important benefit of most EPLI policies is, they offer free legal assistance programs. You have the opportunity to contact an experienced legal firm to help assist you through an employee issue before it turns into a claim. EPLI policies are written on a “claims made” form, which means it provides insurance coverage for claims that occurred and are made during the policy term or within an extended reporting period if selected. These policies generally cover allegations in the following areas:
Discrimination - including age, sex, and gender
Invasion of privacy
Emotional distress or mental anguish
Wrongful termination or discipline
Negligent compensation, promotion, or hiring decisions
LCK Insurance Agency is one of California's most prominent independent insurance agencies. They offer commercial business insurance, employee benefits, life & health insurance, and personal insurance.
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Leap | Carpenter | Kemps Insurance Agency provides Commercial Business Insurance, Employee Benefits, Life and Health Insurance, and Personal Insurance to all of California, including Merced, Atwater, Los Banos, Mariposa, Madera, Fresno, Modesto, Turlock, and Stockton.
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