Could Your Employment Practices Lead You to Trouble?

Safely Speaking

All equipment dealers, regardless of their employee count or revenue, have a lot to consider with regard to human resources (HR) and risk management issues. On an average work day, a business may encounter dozens of HR-related issues, such as hiring bias, wrongful termination, and harassment. The employer’s actions in dealing with those types of situations can be either positive or negative, and can potentially put an organization at risk for employment lawsuits and claims. Employers may approach HR-related issues with the best intentions, but their efforts may be derailed by outdated policies or lack of best practices.

The implications for human resource-related errors can be considerable. Average judgments associated with poor HR practices can be monetarily devastating to a business, let alone the disruption they cause. Even with the best legal representation and an outcome that results in no monetary award, just defending claims of this type can cost a small- to mid-sized company a significant amount of money in attorney’s fees and legal costs.

It is important to consider all opportunities to control the risk and costs associated with HR decisions. While insurance policies can help protect your business from these costs, it also makes sense to safeguard your company with pre-claim best practices and legal expertise to help strengthen your policies, practices, decisions, and actions.

Many companies also need access to HR resources or second opinions to update or create new policies, or address new concerns or hot topics, such as workplace bullying. One example of this kind of service is the Federated Employment Practices Network®which provides Federated Insurance clients access to both online and phone assistance for help with employment-related practices and legal requirements.

Make a plan
“Employment practices” is a broad term that covers hiring, firing, and everything in between. As an employer, you are undoubtedly aware of the rights of employees to file discrimination charges. However, having well-formulated and compliant employment policies supported by consistent enforcement can act as a safety net to protect your business from defense costs and business disruption. Complete and accurate documentation further boosts your ability to protect your business. Augmenting your employment policies with insurance designed to protect you from the costs of litigation can also help shield your business from expenses that could significantly damage your earnings.

Not having a plan when it comes to “hiring, firing, and everything in between” could be setting up your company for HR-related litigation. Effective employment policies aren’t “nice to haves,” they’re “must haves.” Planning, implementing, enforcing—these best practices work in tandem to help guide your business toward positive employment experiences while helping to deflect potential risk and exposure.


Laramie Sandquist, Federated Mutual Insurance Company

This article is intended to provide general information only, and offers no guarantee that the information will result in reduced losses or lower premiums. The services described are provided with the understanding that neither Federated nor its employees provide legal or employment advice. Some services may be provided by third parties and subject to regulations or restrictions in your state. Seek qualified counsel regarding questions specific to your circumstances and state laws. © 2016 Federated Mutual Insurance Company.