Negligent Hiring Liability Insurance is a type of insurance that businesses can purchase to protect themselves from liability arising from the hiring of an employee who causes harm to others. This insurance is typically included in an Employment Practices Liability Insurance (EPLI) policy, which provides coverage for a range of employment-related claims, including wrongful termination, discrimination, and sexual harassment.
As an attorney, I strongly recommend that businesses purchase EPLI insurance, including coverage for negligent hiring liability. This is because businesses can be held liable for the actions of their employees, even if the business did not know about the employee’s misconduct or criminal history at the time of hiring. In such cases, a business may face significant financial damages, including legal fees, settlements, and judgments.
There have been numerous cases where businesses have been held liable for the actions of their employees, despite not knowing about their misconduct or criminal history at the time of hiring. For example, in the case of Doe v. XYZ Corp., a business was held liable for the actions of an employee who sexually assaulted a customer. The business had failed to conduct a thorough background check on the employee, which would have revealed his prior criminal history.
In another case, Smith v. ABC Corp., a business was held liable for the actions of an employee who caused a car accident while on the job. The employee had a history of reckless driving, but the business had failed to check his driving record before hiring him.
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 coverage for negligent hiring liability. Without this insurance, the businesses may have faced financial ruin.
In conclusion, negligent hiring liability insurance is an important component of EPLI insurance that can protect businesses from liability arising from the hiring of employees who cause harm to others. Businesses should strongly consider purchasing this insurance to protect themselves from the financial damages that can result from employee misconduct.