WDIA: How One Practice Owner Navigated an Employer Practices Liability Claim
Matt French
Director of Insurance, Washington Dentists' Insurance Agency
According to the U.S. Chamber of Commerce 48% of employer practice liability claims are filed against small businesses. Dental offices can be lucrative targets for former employees and their attorneys because most claims are settled without trial.
Dr. L owns a single-location, full-service dental practice in Western Washington. His practice employs about 50 team members.
Dr. L terminated an employee who had been habitually late to work. He let the employee go after providing them with several, documented warnings. Now, Dr. L wants other practice owners to know that they are at risk for claims from employees.
“Dentists can be an easy target for law firms that specialize in these kinds of employee claims because the laws in Washington State are not written to protect us,” says Dr. L.
Dr. L’s practice was hit with a class action suit. It surprised Dr. L because he thought class action was reserved for large corporations.
“The former employee and their attorney contacted many former employees of my practice in an effort to grow the claim,” he says. “Fortunately, I have employer practices liability insurance or EPLI policy through WDIA. After some coordination with WDIA, my EPLI legal team just handled it.”
The claim still cost Dr. L stress and effort. His office manager had to provide five years of payroll records. He had to attend mediation, taking time away from the practice.
“I learned the former employee has a track-record of filing wrongful termination claims,” says Dr. L. “When I checked references, other doctors probably couldn’t tell me about it because of non-disclosure agreements.”
Why Dental Practice Owners Need Employer Practices Liability Coverage
Lawsuits filed against practice owning dentists by former employees are on the rise. EPLI safeguards you and your practice against claims from current or former employees. The claims might include allegations of:
- Wrongful termination
- Discrimination (age, race, gender, disability, etc.)
- Harassment (sexual or otherwise)
- Retaliation
- Failure to promote
- Breach of employment contract
These are not malpractice claims covered by your individual professional liability policy. Rather, they are business-related employment disputes that can arise in any workplace. The more team members you employ, the greater your risk.
Can Employer Practices Liability Be Added to Existing Coverage?
Adding EPLI as a rider to your business owner's policy (BOP) is usually possible and practical. Many BOPs that bundle property, liability, and business interruption coverage, offer EPLI as an optional rider. This is often the most cost-effective and convenient way to purchase an EPLI policy.
In some cases, especially if your practice has a large number of employees, and / or a history of claims, EPLI may need to be purchased as a standalone policy. Independent EPLI policies can offer broader coverage limits and more tailored risk management resources, which can be advantageous for growing or multi-location practices.
Key Features to Look For in EPLI
At WDIA we help dentists evaluate elements of the EPLI policy options, including:
- Coverage Limits: Ensure the policy offers adequate protection for legal fees, settlements, and potential damages.
- Defense Costs: Clarify whether defense costs are inside or outside the policy limits.
- Third-Party Coverage: Some EPLI policies cover claims made by non-employees, such as vendors, which can be valuable in certain situations.
- Risk Management Services: Many insurers offer HR hotlines, employee handbook templates, or legal consultations; all helpful tools for minimizing risk.
EPLI is Essential for Practice Owners
The most common areas where dental practice owners face risk for claims from current or former employees include:
- Documentation related to breaks, hourly compensation, and other wages.
- Complex labor laws related to hiring, management, and termination.
- Gaps in practice policies and implementation.
If it’s time to talk about EPLI coverage or update your policy, please get in touch with an expert from our team to discuss your options.
Protect Your Practice from Employee Lawsuits
- Employee Handbook: Detail workplace rules, codes of conduct, disciplinary and termination protocols.
- Document: Keep detailed records of employment-related decisions, disciplinary actions, and terminations.
- Monitor Time: Use software to log employees in and out. Make sure team members get adequate breaks during their shift.
- Prioritize Safety: Ensure compliance with OSHA and other safety regulations to prevent workplace injuries.
- Train Your Team: Provide trainings about management, team communication, anti-discrimination and anti-harassment, and ethical obligations.
- Open Communication: Foster a workplace where employees can report concerns and provide feedback without fear.
- Legal Expertise: Consult with a business attorney who understands dentistry and employment law to ensure compliance.
