Employment Practice Liability claims and lawsuits are damaging to company morale and a huge financial exposure to any medical practice or healthcare organization.

The healthcare landscape is rapidly changing. Mergers and acquisitions and reduction in workforce create significant employment issues. The majority of physician practices do not have an effective risk management plan or insurance coverage to deal with EPL. It is paramount that your organization understands the employment law statutes of your state and implements risk strategies to minimize exposures when sued for Employment Practices Liability.

What is Employment Practices Liability (EPL)?

EPL are liability claims arising from the employment process. These claims may be brought by past, present or potential employees.

Common EPL claims include:

  • Wage and Hour
  • Discrimination
  • Wrongful Termination
  • Retaliation
  • Wrongful Termination
  • Negligent Evaluation
  • Failure to Promote
  • Sexual Harassment
  • Emotional Distress
  • Invasion of Privacy

Hospitals and large healthcare systems are not the only organizations vulnerable to EPL claims.

Small to mid-size medical practices and healthcare organizations are at risk due to the fact that many do not have in-house legal counsel, updated employee handbooks or established and documented procedures for employee hiring, discipline or termination.

EPL Claim Examples

FLSA Wage & Hour claim

A medical practice is required to pay $30,000 in overtime wages to two employees due to misclassification of their administrative staff classification.

Third Party Harassment

An orthopaedic device representative was harassed verbally and then unwanted advances were made by one of the practice’s surgeons. The partners were informed, but no corrective action was taken.

A sexual harassment claim was filed. The defense costs were $52,000 and the claim settlement was $135,000.

How to Protect Against Employment Practice Lawsuits

Effective Risk Management

  • Introduce and maintain job descriptions and employment manuals
  • Involve employees in periodic performance reviews
  • Create a system to document compaints and process to address and resolve issues
  • Understand and abide by state and federal employment laws
  • Identify an environment where employees can report issues without fear of retaliation

Employment Practices Liability Insurance (EPLI)

  • EPLI Insurance insures the healthcare practice against claims by employees regarding their violation of legal rights
  • EPLI Insurance provides insurance for liability damages and defense of EPL claims regardless of merit
  • Limits of liability range from $100,000 to $1,000,000
  • Provides access to valuable risk management tools designed to reduce EPL risk

Employment Practice claims place your organization at great risk. In today’s healthcare environment they are as common as malpractice claims or cyber loss.

Smith Brothers Healthcare Practice assists its clients in addressing the risk issues associated with Employment Practices Liability. We work with you to develop a risk management plan and add EPLI insurance as a risk mitigation tool.

To learn more about your EPL exposures and how to reduce your practice risk, contact David Burke, Professional Risk Specialist at Smith Brothers: 860 430-3256 or DBurke@SmithBrothersUSA.com.

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