This is the most recent verdict by the United States district Court for the Southern District of New York, whereby the court granted $250 million in punitive damages within an employment practices liability (EPL) case, illustrates the significance of EPL insurance. This grant is the so far the biggest in employment discrimination cases (Supreme Judicial, 2010).
The plaintiffs who were the females claimed that they were being paid less than their male colleagues, expectant women were subjected to unfavorable decisions, grievances regarding sexual harassment were overlooked and less qualified male workers were awarded promotions against over qualified females (Supreme Judicial, 2010).
Even if the defendant claimed that it powerfully disputes the ruling, the decision was a game charger, in several respects. For instance, the ruling or any ensuing settlement has a likelihood of contributing to an increasingly controversial environment for workers, mostly regarding claims charging gender and race discrimination. Moreover, an already bolstered plaintiffs’ employment is likely to be more insistent and employers might feel the pressure to agree to advanced settlements, more often purely to evade protracted litigation in addition to reputational and pecuniary risks related to these claims (Supreme Judicial, 2010).
During the ruling, the jury stated that companies should remain vigilant while implementing and enforcing anti-discrimination and procedures. The presence of such policies and procedure may not be enough, the jury added.
For clients within jurisdictions where punitive damages cannot be insured as a matter of public policy, there is an option of employment practices liability insurance (EPLI) polices that consist of punitive damages. Such insurance companies provide punitive wrap policies that can fill coverage gap within circumstances where domestic EPLI carrier is barred from insuring punitive damages. Therefore, according to court, companies are supposed to maximize EPLI coverage within a class action through buying enough limits of liability, which among numerous elements, is dictated by employee count (Supreme Judicial, 2010).
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