Employment Practices Liability – The Risks And The Rates Are Increasing

For most restaurant owners, employment practices liability insurance is not one of the insurance policies in their risk management quiver.  There are many reasons for this from ignorance of the risk exposure itself to a lack of understanding about what is covered by which policy.  There will come a time when this policy is as common in the restaurant industry as fire insurance or workers compensation insurance.  Unfortunately, by the time that happens the costs of these policies will be even higher than they are today.

ihopLet’s take a quick look at a few high profile restaurant employment practices lawsuits that have been in the news recently.  The owner of 7 IHOP restaurants in New Mexico recently agreed to pay $1 million to settle a lawsuit.  This lawsuit had alleged sexual harassment of at least 22 women employees by one of his managers.  The lawsuit alleged that these women employees were subjected to sexually offensive comments, innuendo and unwanted touching.  Can you safely say that every manager in your company is doing all that can be done to prevent your store from being dragged into a lawsuit of this nature?  There is just too much room for errors in communication that could lead to these types of allegations at any business.  Without proper EPLI coverage, you are leaving your livelihood wide open to attack.

In September of this year, a number of employees of Olive Garden, and LongHorn restaurants, part of Darden Restaurants, Inc. filed suit against their employer, accusing the employer of violating federal labor laws by underpaying thousands of servers in many of their locations.  The suit alleges that some servers showed up on time for shifts but were not allowed to clock in until customers began arriving.  Some were also alleged to have been forced to clock out while being required to continue working.  Are you following every detail of wage and hour rules to the letter of the law?  Are you vulnerable to an EEOC or a Department of Labor challenge?

So, we have a trend of larger and larger lawsuit settlements, along with a trend for the Department of Labor to be more involved in stricter enforcement of the rules, alongside more and more EEOC suits.  Add in to the mix that more and more trial attorneys are beginning to salivate over this new and fertile area of the law.  Last of all, we see a strong increase in the pricing of Employment Practices Liability Insurance across the nation.  All of these trends point to increase risks for the restaurant owner.  If you don’t have an Employment Practices Liability Insurance Policy in place, then the forecast for future risks are clear – they are going to increase and could cost you your very business.

Don’t wait until it’s too late to protect your restaurant.  Call your insurance agent today and ask him or her about EPLI.  If you can’t get answers to your questions, please feel free to call Clinard Insurance Group, at 877-687-7557.  We insure hundreds of restaurant all across North Carolina, South Carolina, Georgia, Tennessee and Virginia.  We would be happy to take as much time as you need to chat with you about your employment practices liability exposure and to help tailor a solution that suits your needs and your pocketbook.