Although trade associations are not businesses by definition, they are still vulnerable to some of the same problems that businesses can face in carrying out their operations.
An important part of running an effective trade association is having proper insurance to protect against all manner of risk. Although there are several types of insurance that trade associations can benefit from, one of the most valuable policies is an EPLI policy.
What Is An EPLI Policy?
Employment Practices Liability Insurance, or EPLI, provides coverage for the costs of defense and damages stemming from an assortment of employment-related claims. These might include issues such as discrimination, wrongful termination and workplace harassment.
These types of claims can impact organizations of all sizes in every industry, and they can cause serious damage to a trade association’s reputation and employee morale. Trade associations need to prepare for potential employment practice claims. Organizations do not even have to be in the wrong to be sued, and defense costs can be staggering.
Why Trade Associations Need An EPLI Policy
Here is a look at some of the biggest reasons trade associations should acquire an EPLI policy.
It Offers Broad Protection
Here is a look at some of the claims an EPLI policy can protect against:
- Discrimination based on age, sex, race, pregnancy or disability
- Sexual harassment
- Workplace bullying
- Emotional distress
- Retaliatory claims
- Wage and hour violations
- Wrongful denial of workers’ compensation
- Wrongful termination
Employment Lawsuits Are Common
Lawsuits related to employment practices are very common. Your trade association is more likely to be sued by an employee than it is to have a fire at its premises. Smaller trade associations that do not have a trained human resources manager are particularly vulnerable to such claims. The smaller staff of many trade associations often means there is not enough time or expertise to resolve employee disputes before they can turn into legal issues.
Trade associations can be at risk of an employment claim from the moment they interview a prospective employee. If they choose not to hire someone they interview, the individual could allege that some type of discrimination was behind the decision. If a person is hired and later fired because of poor performance or attendance, they could then claim wrongful termination.
Employment Lawsuits Can Be Expensive
For organizations with fewer than 500 employees, the average cost of employment-related cases that resulted in defense and settlement payments is $160,000, and the average claim takes 318 days to be resolved.
How Can Trade Associations Lower Their Employment Practices Liability Risk?
Insurance offers valuable protection against EPL claims, but there are also some steps your trade association can take to reduce risk. Your insurance agent can review your potential loss exposures and help you ensure you obtain adequate coverage. You can also develop an employee handbook that details the policies and procedures related to attendance, complaints and discipline for those working for your trade association. It is also helpful to create a clear job description and carry out periodic reviews of employees’ performance.
Employment applications should be designed with these potential risks in mind. In addition to including an equal opportunity statement and a statement that employment for your trade association will be at will, you should ensure that your application does not contain age indicators, such as a high school or college graduation date, as this could raise your risk of age discrimination claims. You should also institute a record-keeping system that documents any issues among employees and the steps your association took to resolve these issues.
How Much Does An EPLI Policy Cost?
The cost of insuring your trade association with an EPLI policy depends on several factors, including the number of people your trade association employs, employee turnover and any previous suits that have been lodged against your association.
What Other Insurance Policies Do Trade Associations Need?
An EPLI policy is just one of the policies trade associations need to protect themselves. A professional liability policy is also useful as it can protect associations from risks related to certification errors, class action lawsuits, grant administration mistakes, newsletter liabilities and related issues.
Workers’ compensation insurance can cover medical expenses, partial lost wages, job retraining and hospital visits if an employee of your trade association suffers an accident or injury on the job. Cyber liability can protect your trade association from certain losses related to data breaches.
Reach Out To The Trade Association Insurance Professionals
Your trade association works hard to represent the common interests of your industry. No matter what type of association and industry you are involved in, insurance can help you prepare for unforeseen events so you can focus on the task at hand.
Get in touch with the experienced trade association commercial insurance brokers at CI Solutions to find out how their employment practices, liability insurance and other policies can protect your trade association from various risks. Reach out to CI Solutions by calling 703.988.3665 or by applying for a trade association insurance policy online.