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Understanding workplace sexual harassment and insurance
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The issue of safe workplaces and in particular sexual harassment in the workplace is the subject of a lot of media attention, given recent events. There are multiple parties involved in any incident of sexual harassment in the workplace, from the employees, including the victim, perpetrator and colleagues, to the business and its management.
Insurance is about supporting people when an incident occurs, from covering repairs in a car crash, to paying out for a decimated farm crop. In the context of sexual harassment in the workplace, insurance can be put in place that ultimately supports the victim of any sexually motivated incident. Insurance can also allow the business involved to successfully navigate the path in the case of a sexual harassment claim. That is, the ability to provide the level of financial support required by the victim, as well as managing to stay viable themselves.
Risk Assessment and Sexual Harassment
When considering the role of insurance in dealing with sexual harassment in the workplace, the first step for any insurance broker is a consideration of risk. Minimising risk of sexual harassment through a risk analysis is a welcome first step in addressing the prevalence of sexual harassment in the workplace. Risk reduction may include:
- Training and education for employees regarding harassment prevention
- Strong Human Resources processes and protocols
- Responding promptly to claims of harassment
A risk assessment, and subsequent actions, is a preventative measure. It is critical for improved employee safety. Minimising risk of sexual harassment is also positive for the employer who can take pride in creating a safe environment. In addition a safer workplace is a positive outcome for the business as it reduces risk of sexual harassment and therefore should reduce the cost of relevant insurance policies.
What insurance policies are relevant to workplace sexual harassment?
Claims of workplace sexual harassment are addressed primarily by two types of business insurance, Employment Practices Liability (EPL) and Directors’ and Officers’ Cover (D&O insurance).
Employment Practices Liability is an insurance cover designed to help employers address claims against them by employees. This can include claims regarding sexual harassment in the workplace, but also alleged discrimination, unfair dismissal and other types of workplace harassment.
Directors’ and Officers’ cover is insurance that covers directors and other management of an organisation for wrongful acts, including claims of mismanagement. This cover is relevant in the event that there is a legal claim against the company resulting in defence costs and damages and compensation payments to be awarded. In the context of workplace sexual harassment, when a complaint is filed the employer becomes at risk of a legal claim against them.
Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.
A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.
Directors’ and Officers’ cover is insurance that covers directors and other management of an organisation for wrongful acts, including claims of mismanagement. This cover is relevant in the event that there is a legal claim against the company resulting in defence costs and damages and compensation payments to be awarded. In the context of workplace sexual harassment, when a complaint is filed the employer becomes at risk of a legal claim against them.
How can my insurance broker help me to address workplace sexual harassment?
An insurance broker with experience in risk analysis for workplace safety, and experience with Employment Practices Liability and Directors’ and Officers’ cover is best placed to help you create a safer workplace.
Ask your insurance broker if they have considered the role of insurance and risk analysis in dealing with workplace sexual harassment.
Both risk minimisation and considered insurance policies are essential tools in creating a workplace that seeks to prevent incidents of workplace sexual harassment, while also being equipped to adequately respond to any claims of sexual harassment that do arise.
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
All information above has been provided by the author.
All information above has been provided by the author.
Annemarie Jamieson | ADVISR
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