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Business Insurance

COVID-19 and its Effect on Employment Practices

By September 14, 2020July 11th, 2021No Comments

Team - JonathanThe COVID-19 pandemic has had a massive impact on employees, employers, and human resource departments across the country. Companies are dealing with the complexities of layoffs, furloughs, unemployment, and a remote workforce. Additionally, they are also faced with another set of risk management concerns: employment practices.

Employment Practices Liability Insurance (EPLI) protects businesses against lawsuits from current, prospective, or former employees who allege “wrongful acts” such as discrimination, sexual harassment, or wrongful termination. COVID-19 has opened up a new playing field for potential EPLI claims.

Most commonly, risk of discrimination or harassment claims can result from unfair targeting of employees during furloughs/layoffs due to race, sex, or national origin. Some real examples of this include a gender discrimination claim where a pregnant woman claims she was furloughed due to the pandemic but was replaced by a non-pregnant individual. Another includes a disability discrimination claim where an employee was forced to reveal a multiple sclerosis diagnosis to justify accommodation requests and was subsequently terminated. Both of these examples are real and have been filed in 2020. (source)

Human resource departments and employers can adhere to every employment best practice. But that still does not stop an employee from filing an employment-related lawsuit. When this happens, an attorney must be hired, and the company defended through the court system. This can lead to significant defense cost and time, just to prove that the actual claim itself was false.

COVID-19 will continue to influence our work. Make sure your business is adequately covered and has Employment Practices Liability Insurance.