How Can Companies Protect Themselves Against Employment Practices Liability?

Companies that pride themselves on treating their employees well and creating positive working environments may be surprised when they have to deal with a legal claim regarding their employment practices. It is advisable for employers to maintain an employment practices liability insurance policy as a part of their commercial insurance package. This coverage is a vital safeguard that can protect companies from losses associated with the most common types of employment practices liability claims.

Wage and Hour Disputes

Companies of all sizes must comply with both federal and state law governing wages. Failing to keep up with new developments in this area of the law or trying to work around important legal requirements could result in a costly litigation and penalties.


An employee who feels that an employer is responsible for harassment or has knowingly allowed it to take place can pursue a number of remedies. Many states have committees that are dedicated to investigating harassment claims, and they can award considerable damages to claimants.

Unfortunately, even companies with a good company culture and an experienced human resources team could be subject to serious liability for a seemingly minor oversight or mistake. Moreover, one bad actor who deviates from a company’s policies in how he or she treats employees can cause significant harm to employer-employee relations.