Harassment Claims
Employment claims alleging unwelcome conduct based on protected characteristics creating a hostile work environment, covered under EPLI.
What It Is
Harassment claims in the employment context allege unwelcome conduct based on protected characteristics—race, color, religion, sex, national origin, age, disability, or genetic information—that creates a hostile or abusive work environment or results in adverse employment action (quid pro quo harassment). These claims are covered under EPLI policies.
Sexual harassment claims are the most widely recognized type but harassment based on any protected characteristic is covered. EPLI policies typically cover both the employer's liability and the individual liability of supervisors and managers who engaged in or failed to prevent the harassment.
Harassment claims have become more frequent and more expensive following the #MeToo movement, with increased reporting, more aggressive plaintiff's attorneys, and larger jury verdicts. Defense costs alone often exceed $100,000, and settlements for substantiated claims routinely exceed $250,000. Multi-plaintiff harassment claims can reach into the millions.
Why It Matters for Brokers
Harassment claims represent one of the fastest-growing categories of EPLI exposure. Brokers must ensure that EPLI policies include comprehensive harassment coverage for all protected categories—not just sexual harassment. Additionally, brokers should recommend that clients implement harassment prevention training, establish clear reporting procedures, and maintain documentation of all complaints and investigations.
Real-World Example
A regional sales office has a manager who creates a hostile work environment through racial slurs and discriminatory comments. Four employees file EEOC charges and subsequently sue. Defense costs for the multi-plaintiff case: $340,000. Settlement: $680,000 ($170,000 per plaintiff). Individual defense of the manager: $45,000. Total: $1,065,000. The $2M EPLI policy covers the entire amount after a $25,000 retention. Without EPLI, the company faces over $1M in costs that could threaten the business.
Common Mistakes
- 1Assuming harassment coverage only applies to sexual harassment—EPLI covers harassment based on any protected characteristic.
- 2Not verifying that the EPLI policy covers individual liability for managers and supervisors who commit harassment, in addition to the employer's vicarious liability.
- 3Failing to recommend harassment prevention training, which many EPLI carriers offer at no cost and which can reduce both claim frequency and premiums.
How brokerageaudit.com Handles This
brokerageaudit.com's Policy Checker verifies that EPLI policies include comprehensive harassment coverage across all protected categories and for individual defendant coverage. The system identifies accounts that have not utilized carrier-provided harassment prevention training and recommends enrollment. The Submission Intake captures harassment prevention program details that can improve underwriting results.