Litigation Has Many Costs
Exposure to lawsuits is an inherent part of operating a business. For financial institutions, this exposure increases as the products and services offered intersect with the lives and well-being of not only individuals, but also organizations. The expenses of litigation can increase quickly, and become very costly to financial institutions. While the cost can be substantial in pure dollars, the time and attention diverted from operating the business can also be significant. Additionally, the risk of a lawsuit causing damage to the reputation of the organization often cannot be measured.
Sound Employment Practices Help Reduce Lawsuit Risk
In reviewing employment-related claims, the best defense includes clearly written and consistently applied human resource policies. Regulations require certain written disclosures and acknowledgment of those disclosures as concerns lending and banking services and fees; employment policies are less clear in many areas. Engaging legal counsel to help draft an effective employee handbook is only part of the solution around the host of potential employment exposures including: confidentially, discrimination, harassment, vacation, sick leave, absences, exempt versus non-exempt status, and other rights (including Family Medical Leave Act and whistleblower claims).
Employers can reduce employment litigation exposures when they hire and dismiss with diligence, use severance agreements, properly train and provide appropriate feedback to employees, and engage in open communication. Termination can result in litigation by the dismissed employee; the termination process should be done with prudence, and should involve factual documentation. Avoiding opinions is important in the documentation process, as shared by Jackson Lewis attorney Jeffrey Brecher in this article.
The use of severance agreements should also be considered, and should not be viewed as a “pay-off” or an admission of guilt. This 2009 article on waivers is a good review, but any severance agreement should be reviewed in advance with an expert on employment matters.
Finally, the best solution, of course, is to properly train and provide timely and consistent feedback to employees. This not only helps to avoid costly litigation and disagreements, but leads to improved morale. Coupled with a strong communication model of open dialogue, candidness within employer-employee relationships and ongoing updates regarding the organization are all helpful to productive, engaged employees who deliver high customer service and performance.
Making It Easier for Our Customers With EPL*Assist™
Berkley FinSecure has partnered with Jackson Lewis P.C. to offer employment practices risk management assistance for our customers who purchase Employment Practices Liability coverage. Jackson Lewis is one of the largest employment practices law firms in the country.
Our customers have unlimited access to EPL*Assist services through a toll-free phone number and online through the company’s website. Click here for more information on available services.
Make Sure Your Financial Institution Clients Have the Right Coverage
Make sure your customers have the right insurance coverage from the financial institution experts, Berkley FinSecure. Contact any one of us below for help in making sure your FI customers are protected!
VP Sales and Distribution
Jon Martin 410-372-6325
Chuck Cook 913-553-8559
Jeanne Shrum 207-415-4587
Scott Harris 512-800-5393
Dave Cassel 443-987-8619
Pete Verretto 973-775-5233
Experts focused on your protection.
Products and services are provided by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued. Certain coverages may be provided through surplus lines insurance company subsidiaries of W. R. Berkley Corporation through licensed surplus lines brokers. Surplus lines insurers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds.
For additional information concerning W.R. Berkley Corporation’s insurance company subsidiaries, please visit: http://wrbc.info/