#MeToo - A Culture Shift. Are You Ready?

There’s a movement giving voice and courage to hundreds of women around the country who have been seriously mistreated. We’ve all seen the wave of people standing up and sharing publicly how they have been victimized by employers or colleague. And it’s not just speaking out against one guilty party, such as Larry Nassar. We’ve watched actors, politicians, TV journalists, doctors, and more fall overnight as public claims of harassing words and actions have come to light.

This period, this movement, has brought us to a tipping point in our culture. As a father of a young girl, I’m thankful. Her future of being treated fairly and respectfully as a women is growing. But as an insurance and risk manager for my business clients, I have to warn you. With a movement comes a flood – some true, some not – but the resulting damage to a business’ reputation from even an allegation, and the legal fees to defend it, can be devastating.

How Could This Be My problem?

What we are seeing is not just a fad, but a culture shift according to Patrick Mitchell, management liability product head at Hiscox, in a recent article from Insurance Journal. “In the past, employees feared retaliation and may not have reported harassment. So, while retaliation is definitely possible, it appears now employees have the courage to report regardless of the consequences.”

These culture shifts are not new. In 1991 a similar shift happened when Anita Hill accused Supreme Court Nominee Clarence Thomas of sexual harassment. In fact, that case and the new culture demanding respect in the workplace were catalysts in developing Employment Practices Liability Insurance (EPLI).

With the recent storm of sexual harassment allegations in the news, the insurance industry is expecting a new wave of EPLI claims. And there isn’t an organization or company that is immune. “We’ve seen a lot of headlines for particular industries, but the truth is, sexual harassment allegations can happen in any industry and in companies of all sizes,” Mitchell said.

But My People Are Loyal to Me

Could this really happen in your team? A common misconception by business owners is that they don’t have much risk because they have a small team of loyal employees. We often hear, “My people have been my employees for years. I trust them.” Unfortunately, according to the latest research on EPLI claims, it is the long-term employees which are the most likely to file a lawsuit.  And a suit from a long-term employee tends to cost the most to defend – easily into the tens-of-thousands of dollars – regardless of whether these claims are true or not.

What Exactly Does EPLI Coverage Offer Me?


EPLI insures a business, it’s officers and employees, from harassment and discrimination claims made by employees, job applicants, and former employees – even claims that are false, fraudulent, or frivolous.

This includes claims of discrimination (based on age, sex, race, religion, color and national origin), sexual harassment claims, wrongful termination (including constructive discharge and retaliatory discharge), infliction of emotional distress and breach of contract, violation of the Family Medical Leave Act or other leave laws.

As a business owner, you may have had to cut back on your employees for a season. Cut backs can lead to an increase in employment discrimination claims. You may have dealt with a staff member disgruntled over changes in hours or a job requirement they no longer want to perform. Or perhaps you recently added to your team, but an upset applicant who wasn’t chosen is threatening to sue because you passed them over because of their age. Remember, you as a business owner can do everything by the book, but it is your word against the accuser and now you are forced to defend yourself in legal fees.

It’s Not Just Employees Claims That Are a Threat

EPLI is a coverage that is necessary for any business that employs people, especially organizations in the health care industry. While the most publicized threat is harassment and discrimination claims made by employees, it’s important to understand that a discrimination lawsuit may also come from outside, like a client or vendor.

For example, if you are working in the geriatric care industry you may have a client who accuses your employee of racism. The client claims that one of your care givers provided poor care to their father because he was of Latino decent. Again, it is your word against the accuser and now you are forced to defend yourself and your team.

The bad news is, typical general liability insurance or standard first-party EPLI policies won’t cover these outside harassment and discrimination charges. It is a third-party EPLI policy that can cover in the case of a claim by a customer, client, supplier, vendor or visitor. That’s why it’s key to have a risk-manager helping you read the fine print and make sure you are protected.

Is My Business Protected?

As an outside risk manager for my clients who work in the healthcare industry, I find that most policies either don’t have this coverage at all (large GULP!) or have inappropriate limits for their current business practices. At GBI we make it standard practice to understand each of our clients. Have they grown this year? How are they interacting with the public? Where could their employees be put at risk? And what’s in the fine print of their policies?

As our culture shifts and more people feel free to stand up to harassment and discrimination, others will also feel free to take advantage of financial gain in a lawsuit. Are you ready?