Are You Financially Prepared For An Age Discrimination Lawsuit?

Are You Financially Prepared for an Age Discrimination Lawsuit?

You pride yourself on running an honest business. You're careful to comply as best you can with laws and regulations. You instruct staff to do the same. You strive to treat customers, employees and vendors fairly and with respect.

It comes as a pretty nasty shock, then, when one day you receive a letter from an attorney informing you that your company is about to be sued for age discrimination. Between the feelings of anger and disbelief, one of your first thoughts might be, "How much is this going to cost?"

The baby boom generation is aging rapidly, now between the ages of 50 and 68. Many of these individuals are in their prime earning years. When businesses cut costs, they naturally look at their greatest expenses first. Laying off higher-paid older workers is just one way that a business can end up in trouble.

Another is through its treatment of job applicants. Thousands of workers who lost jobs during the great recession remained unemployed more than six months later. A job seeker in his 50's who is turned down for dozens of jobs may come to see age discrimination as the reason, and he may turn to the courts or the government. The U.S. Equal Employment Opportunity Commission reports that the annual number of age discrimination complaints it received jumped 50 percent from 2006 to 2008. The number remained above 20,000 in the years through 2013.

Some businesses have had to pay substantial damages. For example, during 2014:

•The EEOC ordered an insurance business to pay $300,000 to three former employees for age-based harassment, discrimination and retaliation.
•A chain of retail stores was ordered to pay $900,000 for systematically terminating employees over the age of 40 during job cutbacks and retaliating against managers who resisted.
•A California jury awarded more than $26 million to a man who sued a retail chain for age discrimination, harassment and wrongful termination.

Even a groundless lawsuit can put a business in a financial hole, because good legal defense is costly. Employment practices liability insurance can be vital at a time like this.

EPLI covers the insured business for losses it becomes legally obligated to pay because of a claim by an employee for a "wrongful employment act." A typical policy defines this as including things such as wrongful termination, demotion, failure to hire, discrimination, harassment, retaliation, and violations of certain laws. It will cover the cost of providing a legal defense against the allegations and the amount of any resulting damages or settlement, up to the amount of insurance purchased. Coverage applies to acts that occur after a date specified in the policy and reported during the policy term.

Even the best behaved organizations can find themselves on the receiving end of lawsuits filed by employees who believe they were ill-treated. These organizations cannot afford to go without the financial protection an EPLI policy provides. Contact us to learn how you can protect your business.

If you have questions or concerns on this issue, do not hesitate to call Zeiler Insurance and speak to one of our customer service representatives. As an independent agency, Zeiler Insurance prides itself with quality customer services for the people of the Chicago-land area and the rest of the Midwest. Customer or not, we can review your insurance and see if you are being protected appropriately for the right price.

-Karli Zeiler

karli@zeiler.com

(708) 597-5900  X130

www.insurancenewsletters.com

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