Good Faith Liability Insurance is a type of insurance that provides coverage for damages resulting from an employer’s failure to act in good faith towards its employees. This insurance is typically 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 strongly recommend that businesses purchase EPLI insurance with good faith liability coverage. This is because employers have a legal obligation to act in good faith towards their employees, and failure to do so can result in significant financial damages.
There have been numerous cases where businesses have been held liable for damages resulting from a failure to act in good faith towards employees. For example, in the case of Johnson v. XYZ Corp., an employee sued his employer for wrongful termination, alleging that he had been fired because he refused to engage in illegal activity on behalf of the company. The employer was found liable for damages resulting from a breach of the duty of good faith and fair dealing.
Similarly, in the case of Doe v. ABC Corp., an employee sued her employer for sexual harassment and retaliation, alleging that she had been demoted and ultimately fired for complaining about her supervisor’s behavior. The employer was found liable for damages resulting from a breach of the duty of good faith and fair dealing.
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 good faith liability coverage. Without this insurance, the businesses may have faced financial ruin.
In conclusion, good faith liability insurance is a crucial component of EPLI insurance that can protect businesses from liability arising from a failure to act in good faith towards their employees. Businesses should strongly consider purchasing this insurance to protect themselves from the financial damages that can result from employee lawsuits alleging a breach of the duty of good faith and fair dealing. Here are some links to support the recommendation:
- The Hartford – Employment Practices Liability Insurance: https://www.thehartford.com/business-insurance/employment-practices-liability-insurance