Written by Sarah Cohen, Director of Risk Management

    On January 11 2011, the U.S. Equal Employment Opportunity EPLI ApplicationCommission (EEOC) released its 2010 statistics regarding the number and types of discrimination charges filed.  While many of the different types of charges had an increase, 2010 marked a record year for the number of discrimination charges. Additionally, 2010 was the first time in which retaliation charges surpassed racial discrimination as the most filed charge.

    A quick recap of the EEOC 2010 stats:

    • 36,258 charges of retaliation discrimination (up 7.8%)
    • 35,890 charges of race discrimination (up 6.9%)
    • 29,029 charges of sex discrimination (up 3.6%)
    • 25,165 charges of Americans with Disabilities Act violations (up 17.3%)
    • 23,264 charges of Age Discrimination in Employment Ace violations (up 2.1%)
    • 11,304 charges of national origin discrimination (up 1.5%)
    • 3,790 charges of religious discrimination (up 11.9%)
    • 1,044 charges of Equal Pay Act violations (up 10.8%)
    • 201 charges of Genetic Information Nondiscrimination Act violations (first year recorded)

    Source:  EEOC

    Financial Results of Sex-Based Discrimination

    What do 29,029 charges of sex-based discrimination translate to in financial terms?

    • The EEOC report a total 2010 monetary benefit of $129.3M – excluding monetary benefits won through litigation.
    • Sexual harassment charges alone equaled another $48.4M in 2010.

    Looking at all charges filed in 2010, the EEOC collected more than $404 million from employers on behalf of employees – the highest annual total ever!

    Employment Practices Liability Insurance (EPLI)

    While Employment Practices Liability Insurance may seem like an unneeded expense to the employer, it’s important to remember that these claims will take valuable time and money to defend.  Employers can spend thousands of dollars on legal fees alone, defending the position that they had no negligence in the alleged incident.  Even without solid evidence of negligence, some employers end up settling in order to save their public image, avoid having to drag out negotiations, or have the suit bought to litigation.

    The cost of Employment Practices Liability Insurance (EPLI) is determined by the number of employees and the employer’s HR practices. Companies spend thousands on General Liability, Property, Umbrella and even Professional Liability coverage. However, the above EEOC statistics show that there is an overwhelming increase of EPL claims that may pose more of a financial and reputational loss for companies over other types of commercial claims. For companies that say that they don’t have it in their budget for this coverage – I say to you:

    Can you afford to pay $50,000-$100,000 merely to defend yourself against an allegation?