In the wake of the recent U.S. Supreme Court decisions concerning an employer’s liablity for sexual harrasment in the workplace insurance, companies nationwide have recently introduced a type of liability insurance (EPL), which covers companies in cases of sexual harassment, wrongful termination, and discrimination.
Sales on this insurance have skyrocketed over the past five years, second only to the value of their premiums which have also increased from a reported $100 million to over $200 million dollars. For many companies facing increasing reports of widespread workplace harassment it is less expensive to buy EPL insurance than to handle employee lawsuits. Many companies say they are reacting to statistics which indicated incidents of sexual harassment in the workplace are increasing. The EEOC reports that the number of harassment complaints jumped from 6,883 in 1991 to 15,889 in 1997. Civil rights and legal experts argue that it is unacceptable and unlawful for insurance companies to cover the costs incurred by intentional acts of abuse and discrimination.
Several states, among them California and New York, have denied companies the right to insure against punitive damages, claiming that it will make employers less likely to prevent cases of workplace sexual harassment.