As more and more companies downsize, more and more workers are filing lawsuits claiming their rights have been violated, which is why all businesses should carry employment practices liability insurance (EPLI).

EPLI protects companies against many kinds of employee lawsuits, including claims of sexual harassment, discrimination, wrongful termination, breach of employment contract, negligent evaluation, failure to employ or promote, wrongful discipline, deprivation of career opportunity, wrongful infliction of emotional distress and mismanagement of employee benefit plans.

Factors that impact EPLI premiums include the type of business being insured, the number of employees in the company and whether the business has been sued over employment practices in the past. Policies reimburse companies for the cost of defending a lawsuit, regardless of whether the business wins or loses the suit, and for judgments and settlements. Generally, EPLI does not pay for punitive damages or civil or criminal fines. Also, liabilities covered by other insurance policies such as workers compensation are excluded from EPLI policies.

Aware that smaller companies need EPLI, some insurers provide the coverage as an endorsement to business owners policies, which changes the terms and conditions of the policies.

To prevent lawsuits, educate managers and employees; create effective hiring and screening programs to avoid discrimination in hiring; post corporate policies and place them in employee handbooks; show workers what steps to take if they are sexually harassed or discriminated against; ensure supervisors know what behaviors are not permissible; and document complaints, related meetings and steps the company is taking to prevent and solve employee disputes.

If you need EPLI, give me a call at (401) 431-9200 or send an e-mail to whunt@shove.com.

All of us are looking to reduce expenses these days and saving on insurance premiums is one way people feel they can pocket some extra bucks. It is possible to lower insurance costs, but be careful when doing so.

I want to let you know what I think is bad and good advice on how to lower insurance premiums, and I am going to pass on 10 sound action steps you can take to cut costs. Among the myths about insurance policies are:

• All insurance policies are the same except for the price. Insurance policies are legal contracts and, aside from some industry standards, each insurer’s policy is unique. Some cover far more or less than others.
• Reliable insurance advice can be found on consumer Web sites and in publications. So-called experts on those sites and in those publications have made poor recommendations such as dropping replacement cost coverage for “actual cash value” coverage, something that is likely to save the insured little in exchange for much in the way of lesser coverage. Another whacky idea out there is that consumers should drop their physical damage and uninsured motorist coverage while reducing their liability coverage to the minimum required by the state. However, those are critical coverage provisions that protect drivers from catastrophic losses.
• You can drop some areas of coverage because there is duplicate coverage in policies. Financial experts may recommend dropping coverage for uninsured motorists and medical payments in an auto policy if you have health or workers compensation insurance. Uninsured motorist insurance covers much more than medical expenses, however, and tampering with that coverage can put you, family members and passengers at great risk.
• People should insure a home or business building based on its market value. However, market values can fluctuate and drops should not automatically prompt people to lower insurance limits. It’s true home prices have declined significantly during the recession, but the cost to rebuild homes has jumped by about 4 percent.

The top 10 steps I you should take to control your insurance costs are:

1. Investigating coverage and product options with your independent insurance agent.
2. Weighing whether increasing deductibles is appropriate. We advise against raising deductibles on the “it will never happen to me” theory. It’s better to hike deductibles during prosperous times when a consumer’s ability to cover a loss is greater.
3. Asking for multiple-policy discounts.
4. Requesting discount credits for circumstances such as working close to home and apparatus such as anti-theft devices and fire extinguishers.
5. Dropping non-critical coverage such as towing and rental reimbursement.
6. Resisting the impulse to eliminate physical damage coverage on your vehicles.
7. Implementing risk management alternatives to insurance such as placing valuables in a safety deposit box rather than scheduling them under a policy.
8. Selling possessions you can do without so you can cancel the insurance on those items.
9. Seeking advice from your independent insurance agent who is familiar with you and your circumstances.
10. Questioning any and all advice you receive.

If you need to talk to someone about reducing your insurance premiums, give me a call at (401) 431-9200 or shoot over an e-mail to jdfrancis@shove.com.