SMALL BUSINESS OWNERS
Professional Liability Insurance, also known as errors & omissions (E&O) insurance, provides financial protection for businesses and professionals in the event they are sued in conjunction with the performance of their duties as they relate to the services provided by a company or professional.
1. WAGE AND HOUR LAWSUITS
One of the biggest risks HR professionals takes involves issues with wage and hour disputes. In fact, according to the United States Department of Labor, about 70 percent of employers are not in compliance with Wage and Hour Laws. Because of technology, many employees are able to do their work from any location as well as any time of day. As a result, there can be “off the clock” work issues if no definite ground rules have been established.
2. EMPLOYMENT FORM ERRORS
Too often, mistakes are made on employment forms, or they’re not completed on time. That’s why you need to ensure that new employees fill out their employment forms within three days after they’ve arrived. Also, don’t throw out the forms but keep them on file for three years or more after the date an employee has been hired.
3. MISCLASSIFICATION OF WORKERS
This is another huge mistake that could lead to being sued. You may be tempted to classify as many people as possible under the independent contractor’s code to save money and from not having to pay for entitlements, such as workers’ comp, disability insurance, unemployment insurance, and family leave benefits.
4. HIRING MISTAKES
Errors can easily be made when advertising for job positions and during the hiring process. These mistakes typically involve using discriminatory wording in classified employment ads. For example, it’s wrong to use terms, such as “recent college graduate” in a classified ad.
Furthermore, never inquire about the age of the applicant, their gender, or disability status. Instead, all your questions should revolve around whether or not someone is qualified for the job.
5. BLUNDERS WHEN FIRING PEOPLE
Probably the top reason for workplace lawsuits stems from mistakes made when firing workers. Instead of surprising employees with a “pink slip”, give them advanced warning, so they can improve their performance to avoid getting fired.
But if you do need to fire someone, ask another supervisor to be with you to serve as a witness. After the meeting, document what was said. Additionally, never discuss the firing with another employee.
THE BOTTOM LINE:
- You need professional liability insurance.
- Having professional liability insurance coverage is especially crucial if you’re an HR professional as there are several risks involved in this job.
- Primordial is the solution for your insurance needs.
- Within the Professional Liability Coverage, there is Wage & Hour Liability, EPLI, and D&O (Directors and Officers) Liability.
You can depend on Primordial to provide you with the best professional liability insurance that meets your specific needs. Our underwriting team has more than three decades of experience, besides the ability to offer customized limits, coverage, deductibles and premiums to create the ideal plan for your personal protection. We can provide a free policy review and let you know if there are any gaps or issues.
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