A Growing Concern
After recent celebrities and politicians have been publicly outed concerning harassment, restaurant / bar owners might be concerned that they could be the next headline.
Especially hospitality establishments, which often have attractive waitresses, bartenders, and high turnover.
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?
The key coverage for this risk-exposure is ‘Employment Practices Liability Insurance’.
|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.
In addition to insuring ‘harassment’ situations, there are 2 other employment-related exposures it covers…
- Business’s liability for Wrongful Termination
- Business’s liability for Discrimination
What limits should I choose?
Considering the nature of this issue, restaurants / bars 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, businesses 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.