A Growing Concern
After recent celebrities and politicians have been publicly outed concerning harassment, many organizational leaders are concerned that they could be the next headline.
Especially churches and schools, which hold a reputation for being ‘above-reproach’, are thinking about how to protect themselves.
One of the first landmark cases that set precedent in this area was ‘McIntre vs. Manhattan Ford, Lincoln-Mercury, Inc.’ in 1994.
A $6.6MM unanimous jury verdict was awarded to a woman for her claim that she was subjected to two and a half years of sexual harassment. The plaintiff presented evidence as to seventeen (17) separate incidents of harassment.
Here’s an article with more details about the case.
How do you insure this risk?
There are two coverages to consider for harassment related risk-exposures:
|Employment Practices Liability Insurance
EPL Insurance covers a situation where an employee or volunteer alleges harassment. A principal accused of inappropriate interaction with a secretary, or a youth pastor accused of unwanted physical contact with a youth volunteer….EPL Insurance would cover harassment in the capacity of a employer to employee/volunteer relationship.
|Abuse and Molestation Insurance
Abuse and molestation covers a situation where a third-party accuses the organization of harassment or neglect in a harassment situation. IE – A high-school teacher engaging in inappropriate relations with a student. Abuse and Molestation insurance also covers the organization for ‘neglect in a harassment situation’. If, while at a church retreat, a teenage boy makes unwanted physical contact with a female student, the parents can sue the church or school for being negligent and not appropriately monitoring/protecting the situation.
In addition to insuring ‘harassment’ situations, there are 2 other employment-related exposures EPL covers…
- Business’s liability for Wrongful Termination
- Business’s liability for Discrimination
What limits should I choose?
Considering the nature of this issue, churches and schools ought to err on the side of higher limits. Sexual assault can cause irreparable harm, and allegations / litigation can easily reach $500,000.
Is it expensive?
Rates for this coverage are still fairly reasonable. Depending on the amount of payroll, churches and schools pay between $500 and $10,000 for this coverage.
But as the culture trends toward bold allegations and ‘outings’, this coverage may become more costly and scarce.