When it comes to Business Insurance policies, Workers Compensation should be at the top of your list as a business owner or risk manager. Although it is not required in Texas, it is highly recommended.  That being said, YES, it is necessary. Lets take a quick look at Part I and Part II of the Workers compensation policy and see why it's necessary. 

• Part I of Workers Compensation addresses employee work related injuries or occupational disease. This is essentially the heart of the Workers Compensation policy where the insurer agrees to pay for injuries sustained during the course of employment. Part one of the policy has eight clauses. One thing to note: Health insurance and General Liability do not cover work related injuries. 

 

• Part II is Employers Liability Insurance (not to be confused with Employment Practice Liability (EPL)). This part addresses the employers protection. If the employee believes the employer is negligent in the work related injury, and decides to sue, this part of the policy will respond. It will cover attorney fees, court fees and judgments or settlements. There are nine clauses to part two of the policy. 

As you can see, there's a reason most states require employers to have Workers Compensation coverage because it is extremely necessary. To be honest, in my 12 years as an insurance agent, I've seen more claims from Workers Compensation policies than any other policy. If you have questions about Workers Compensation coverage or any other Business Insurance policy, please feel free to contact me. If you would like a quote, please fill out the application below. To read another post about Workers Compensation, see this previous post Is Workers Comp Insurance Required? 

Jason Matison
Commerical Insurance Agent
Austin, Texas

It seems employers are exposed to lawsuits more now due to social media and information on the Internet. This is why Employment Practices Liability Insurance (EPL) is a Business Insurance policy that should not be overlooked.  Employees are more aware of their rights these days. In most cases, 20 years ago, you had to go to the library, or know a lawyer to know your rights or understand them. Lets face it, now it's right at your finger tips. A tweet, Facebook post, or an Internet search can shed a lot of light on an unknown subject. You can even use Google to look up past EPL lawsuits and see whether you have a valid case/claim. Some common EPL claims are:
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• Sexual harassment
• Discrimination
• Wrongful termination
• Breach of employment contract
• Negligent evaluation
• Failure to employ or promote
• Wrongful discipline
• Deprivation of career opportunity

Most employers can look at this list feeling confident they are doing the right thing and not have to worry about a lawsuit or claim. The problem with that mindset is you could be in the right, but you still have to defend the claim. You can’t just say, here's our employee handbook or we did training on this subject, and expect the lawsuit to be dropped. These claims can be very costly. So whats the cost?  According to AMTrust Financial, the average discrimination claim costs $125,000 (Top Trends EPL). That’s just the hard cost. Think about the possible soft costs like, employee morale, management time expanded on the case, higher employee turnover and not to mention a potential copycat case from another employee. Getting an Employment Practice Liability Insurance (EPL) is very easy these days. There are many factors that determine what the premium will be. Below is a list of some things underwriters look at: 

Location
California, Illinois, Michigan, New Jersey, and Texas have some of the highest claim frequency with California being the highest. In contrast, states such as West Virginia, Kansas, and New Hampshire have had relatively low EPL claim frequency and severity.

Industry
Some industries have higher frequency. For example, restaurants have proven to be the highest. 

Number of Employees
More employees the higher the probability of a claim

Claim History
If a company has a history of EPL claims it can be difficult to find a company to underwrite it, and if you do, they will most likely surcharge for past claims, which will make premium higher. 

Employee Turnover
High turnover can be a red flag for many things, which can lead to higher premiums or limited markets to write the risk. 

If you have any questions about Employment Practices Liability, or any other Business Insurance, please feel free to contact me. If you'd like a quote, please fill out the application below. Let me know if you have any questions. I would be happy to meet with you. 

Jason Matison
Commerical Insurance Agent
Austin, Texas