Recently, Insurance Business magazine reported on the greatest risk for workplace lawsuits. Class-action lawsuit expert Gerald Maatman stressed that all companies are potentially at risk for wage and hour suits, however, businesses in some states carry greater liability than others.
Insurance Business revealed the top 5 “judicial hellholes” of 2013, where 72% of the 141 class-action lawsuits heard in state court took place.
The bottom line? California, New York, Florida, New Jersey and Texas Home Health Care Owners need to be sure they are “armed to the teeth” with Insurance Coverage for
- EPLI (Employment Practices)
- D&O (Directors & Officers)
Individual law systems have turned these states into “judicial hellholes,” where legislation is more favorable toward class-action suits and, therefore, towards potential employment practices or directors and officers lawsuits.
“In these states, the rules are broader and it’s easier to win a suit with collective action. The laws are employee-friendly and have the most generous remedies, particularly for wage and hour”.
“Anecdotally, it makes sense that those states experience more lawsuits. It’s like bees to honey.”
In California, where 56 individual lawsuits were filed in 2013, the state system is especially conducive to workplace litigiousness. The American Tort Reform Association even went so far as to call the Golden State “something of a last-stand for a stubborn nuisance of a liability theory.”
“California has lawsuit filings every day.. It is a very anti-employer jurisdiction, which makes insurance coverage almost a necessity.”
Also identified were
- New York
- New Jersey
- Massachusetts and
The prudent thing to do is to buy Employment Practices Liability Insurance &/Or Directors and officers Liability… and then, get the best terms you can for FLSA (Fair Labor Standard Act) claims.
Up till now, insurance companies have been reluctant to cover FLSA claims since it is essentially bad record keeping that causes the problem. Essentially a maintenance claim. And if it’s one thing Insurance Companied DON’T LIKE, it’s maintenance claims!
Because of marketplace pressure, many companies will now offer a ‘sub limit’ for this coverage … a fixed amount that is less than the policy limit.
So, the short version is…
Tighten up procedures and buy the insurance.
Call me, we can help!
PJ 201 945 3100