Emotional Distress Liability Insurance is a type of insurance that provides coverage for damages resulting from emotional distress or mental anguish caused by an employer’s conduct. This insurance is often included as part of an Employment Practices Liability Insurance (EPLI) policy, which protects businesses from a range of employment-related claims, including discrimination, wrongful termination, and sexual harassment.
As an attorney, I highly recommend that businesses purchase EPLI insurance with emotional distress liability coverage. This is because employees can suffer significant emotional harm as a result of discriminatory or harassing behavior in the workplace, and businesses can be held financially responsible for these damages.
There have been numerous cases where businesses have been held liable for emotional distress damages resulting from their conduct towards employees. For example, in the case of Garcia v. XYZ Corp., an employee sued her employer for discrimination and harassment, alleging that she had suffered severe emotional distress as a result. The employer was found liable and ordered to pay a significant settlement to the employee.
Similarly, in the case of Smith v. ABC Corp., an employee sued her employer for sexual harassment and emotional distress, alleging that she had suffered severe anxiety and depression as a result of her supervisor’s behavior. The employer was found liable and ordered to pay a significant settlement to the employee.
In both of these cases, the businesses were able to pay for the damages and legal fees associated with the lawsuits because they had EPLI insurance, including emotional distress liability coverage. Without this insurance, the businesses may have faced financial ruin.
In conclusion, emotional distress liability insurance is a crucial component of EPLI insurance that can protect businesses from liability arising from their conduct towards employees. Businesses should seriously consider purchasing this insurance to protect themselves from the financial damages that can result from employee lawsuits alleging emotional distress.