Third-party employment practices claims

Does your Employment Practices Liability policy cover third-party claims?  You probably are familiar with the typical first-party claims that might be brought against your company by employees:  allegations of wrongful termination, unfair promotion or review practices, unfair disciplinary measures, and various forms of harassment or discrimination.

But, did you know that employees of a company’s customers and vendors, the company’s own leased workers and independent contractors—indeed any individuals or groups that come in contact with the business or its employees—are all potential plaintiffs in a third-party Employment Practices lawsuit?

All that’s needed is a charge of harassment, coercion or discrimination; no employment relationship needs to exist. For example, an employee writes a threatening note or forwards an offensive or sexually explicit joke to a customer or vendor. A third-party EPL lawsuit ensues.

According to the National Underwriter, typical third-party EPL complaints generally involve allegations of discrimination and harassment based on race, sex, religion or ethnicity, causing emotional distress—and these types of complaints from all parties are on the rise.

For more information on Employment Practices Liability coverages available to NGA members, contact the program administrator for GlassInsure, NGA’s sponsored insurance program, at 800/640-7601.