Whistleblower claims arise when an employee reports illegal or unethical behavior by their employer. These claims can result in significant liability for employers, including legal fees, fines, and damage to reputation. Whistleblower claims can be covered by Whistleblower Claims Liability Insurance, which is often included as part of an Employment Practices Liability Insurance (EPLI) policy.
One case that highlights the importance of EPLI coverage for whistleblower claims is Agarwal v. Johnson & Johnson, No. 1:16-cv-00217 (D.N.J. Dec. 20, 2019). In this case, the plaintiff alleged that she was terminated in retaliation for reporting violations of federal law related to the marketing of a prescription drug. The plaintiff was awarded $1.2 million in damages, including back pay, front pay, and emotional distress damages. Link: https://www.leagle.com/decision/infdco20191223512
Another case that demonstrates the potential risks of whistleblower claims is Carter v. Progressive Cas. Ins. Co., No. 4:20-cv-02070 (S.D. Tex. Aug. 25, 2020). In this case, the plaintiff alleged that she was terminated in retaliation for reporting fraudulent activity by her employer. The plaintiff was awarded $450,000 in damages, including back pay and emotional distress damages. Link: https://www.courtlistener.com/recap/gov.uscourts.txsd.1905562/gov.uscourts.txsd.1905562.46.0_1.pdf
Whistleblower Claims Liability Insurance can help employers mitigate the risks associated with these types of claims by providing coverage for legal fees, settlements, and judgments. This type of coverage is often included as part of an EPLI policy, which provides broader coverage for a range of employment-related liabilities.
In summary, Whistleblower Claims Liability Insurance provides coverage to employers in the event that they are sued for retaliation or other claims related to whistleblower activity. Employers should consider obtaining an EPLI policy that includes this type of coverage to ensure that they are protected from the potential costs associated with whistleblower claims.