The asset management industry is subject to a range of risks and it is customary for organizations to purchase insurance to mitigate those risks. The most common forms of insurance for hedge funds are management liability policies, including director’s and officer’s liability policies and errors and omissions policies. While these may cover the majority of operational risks, they may not cover employment practices liability.
Employment Practice Claims Increasing
Not only is the frequency of claims rising, but the costs associated with them are as well. According to Owens Group Insurance, this is especially true of the fees associated with defending employment practice claims as cases can take many months to reach a resolution. Common causes of claims are discrimination based on pregnancy and health conditions, the conducting of illegal background checks on employees and sexual harassment.
The Type of Coverage You Need
An employment practices liability policy will protect your organization from a number of different types of claims. These include:
- Discrimination against employees or potential employees based on gender, age or race
- Failure to hire or to promote based on health conditions or physical ability
- Sexual harassment, including verbal and physical harassment, solicitation of sexual favors and unwanted sexual advances
- Wrongful termination based on the breaching of more than one of the terms of the employment contract
While adding this policy to your existing coverage may mean extra costs, it will offer vital protection to your organization. It will also provide peace of mind to your investors. Consult an insurance or legal expert to make sure that you have the coverage you need.