What is protected by Employment Practices Liability Insurance?

One of the benefits of obtaining your (discounted) medical malpractice insurance through The Doctors’ Insurance Agency/The Doctors’ Company is: you receive important business and ‘boss’ liability insurance for great discounted prices as well.  Underwriting and management at TDC have worked for years with NAS insurance Services to bring these complementary products to our physicians.

It seems that almost every practice is confronted with the threat of one employee, or co owner, junior or senior person or partner who feels neglected or picked on  or both. Recently, a Pediatrician made an innocent comment to one of the visiting nurses, working there on contract only. He said, yes, it would be nice to get together with everyone off site to work on all of our relationships.  Finally, reducing some of that communication to an email and pulling it out of context, it was made to look like an invitation to meet off site, away from the office.  The group had to defend this cause of action aggressively pursued by the ultimately fired contract nurse.

If you are a group of between, 2 – 10 employees, you might be eligible for employment practices liability for up to $ 500,000 of coverage  at less than $ 1,500 per year. Adding the business and management liability insurance back into the coverage adds just an additional $ 1,000. In this day and age of constantly representing your practice value for potential sale, taxes, negotiating a lease or working on a renewed contract with a payer organization, having accurate financial representation is vital to the integrity of the medical group.

For approximately, $ 2,500 – 3,000 your group could protect all managers and owners against the claims that allege damage was brought to the organization by virtue of a contract negotiation and / or, your group having to make the tough decision to de credential one of the members.  Recently, an anesthesiology group had to discontinue their President due to behavioral problems; another situation, the office manager continued to bring her son into the office disrupting the flow of work and preventing fair exchange of information during the day, or, finally, a surgical group failed to hire resulting in that physician making a claim of anti trust against the group’s owners.

Claims in the arena of managing the organization and the contracts can happen.

In the non medical field, I’ve outlined a few real life claims so that you can see the parallels.

CLAIMS EXAMPLES:

A. Employment Practices Liability

1. Wrongful Termination: McKenzie vs. Miller Brewing Co., et al A former Miller Brewing Company executive was awarded $26.6MM by a Wisconsin state jury for wrongful termination where his employment was terminated after a female colleague complained about his recounting of a racy episode of the Seinfeld television show at the office. The jury found that the incident was not sexual harassment. Miller argued that it made its decision to fire the executive due to hispoor performance. However, the jury did not afford this explanation any credibility.

2. Sexual Harassment: McIntre vs. Manhattan Ford, Lincoln-Mercury, Inc. A $6.6MM jury verdict was awarded to a woman for her claim that she was subjected to two and a half (2 ½) years of sexual harassment. The verdict was reduced to $3.7 million by the trial judge. The plaintiff presented evidence as to seventeen (17) separate incidents of harassment and alleged a daily barrage of abusive language. The trial court, in refusing to vacate the award of punitive damages in its entirety, stated that “the amounts previously awarded to plaintiffs in Title VII cases have not been a sufficient deterrent in view of the significantly increasing number of employment claims.

3. Disability Discrimination/ADA:  Burch vs. Coca-Cola Co. A recovering alcoholic’s ADA claim was dismissed and the jury verdict vacated on appeal, after a jury had awarded the employee $109,000 in back pay, $700,000 in front pay, $300,000 in compensatory damages and $6MM in punitive damages. The Fifth Circuit dismissed the case holding that an employee’s claim of frequent inebriation falls short of the permanent impairment requisite of the ADA.9 The ADA is designed to remove barriers, the Court held, for permanently disabled workers.10 Although the employee was not held to have met the ADA’s threshold requirements of a permanent impairment in this case, the Court limited its decision and stated that it did not hold that an alcoholic was precluded from stating a claim under the ADA.

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