Employment-related insurance is a key consideration for growing companies and start-up businesses, particularly those operating in the state of New York and thus covered by the state’s employment and labor laws. From the word go, employers should be cautious not to forget or ignore the fact that disability is one of the protected classes under New York City and State Labor Laws, including the New York City Human Rights Law (NYCHRL) (NYC Administrative Code 8-101 et seq.), the New York Equal Pay Act (N.Y. Lab. Law § 194), and the New York State Human Rights Law (NYSHRL) (N.Y. Exec. Law § 290 et seq.).
In light of these statutes and laws, it is crucial for employers to obtain disability insurance to protect themselves against disability claims that may be made by their employees. Notably, New York is one of the few states where employers are required to provide disability benefits insurance for off-the-job illnesses or injuries to employees, and, as codified under N.Y. Work. Comp. Law § 203 of New York’s Disability Benefits Law, eligible employees must be provided with payment of disability benefits by their employers.
As we move this discussion forward, we have, in this blog post, discussed why employers of start-ups and growing businesses and companies in New York should consider purchasing EPLI in addition to other insurance policies.
New York Law on Employment Practices Liability Insurance (EPLI)
Abbreviated as EPLI, employment practices liability insurance is a type of insurance policy that covers businesses and companies against claims by employees alleging that their rights as employees of the company or business in question have been violated. This means that EPLI is another optional insurance policy that employers could consider.
It is crucial to note that although EPLI can protect employers from lawsuits in which employees allege their rights have been violated in claims that include, but are not limited to, wrongful termination, discrimination, infliction of emotional distress, and sexual harassment, the type of plan and insurance carrier determines the degree of EPLI coverage.
Businesses and companies should particularly be careful with claims touching individual rights, such as emotional distress, because they could put employers into great liability under federal laws, including, but not limited to, Section 1981 and Title VII of the Civil Rights Act of 1964 (Title VII). In our blog post titled “Compensatory Damages 101, Your Guide To Emotional Distress,” we mentioned that while Title VII is very comprehensive and elaborate on recoverable damages and penalties, “compensatory damages” are usually awarded due to emotional distress and suffering, and pain such as an individual may have gone through.
We also noted that if an employee who alleges to have suffered emotional distress and suffering prevails in a Title VII litigation, a court technically classifies compensatory damages into three levels, including (1) Level I or garden variety (the general standard for this level of emotional distress claim ranges from $30,000 to $125,000), (2) Level II or significant emotional distress (the general standard for this level of emotional distress claim ranges from $50,000 to $200,000), and (3) Level III or egregious emotional distress (the general standard for this level of emotional distress claim ranges from $200,000 to $1,000,000). As also noted in this blog post, although the cap covers employers with 501 or more employees, Title VII provides a cap of $300,000 regardless of any other damage awarded.
Be on the lookout for our next blog post titled “Obtaining Workers’ Compensation Insurance in New York,” in which we will hammer on the importance of obtaining workers’ compensation insurance, as well as what applicable statutes in New York say about this insurance policy.
As usual, stay tuned for more legal guidance, training, and education. In the interim, if there are any questions or comments, please let us know at the Contact Us page!
Always Rising Above the Bar,
Isaac T.,
Legal Writer, Author, & Publisher.