Real Estate Liability

What is an Employment Practices Real Estate Liability Policy?
This real estate liability policy provides coverage for a broad range of liability claims arising from employment-related actions. The most common are discrimination, retaliation, defamation, harassment, unfair hiring practices wrongful termination and other workplace torts.

Why Do I Need It?
Every real estate firm, large or small, faces the reality that it will be the target of legal action from past, present or prospective employees.  Employment-related claims can have a serious financial impact on a company’s bottom-line.  In the face of this increased risk to your real estate firm, it is also increasingly likely that your current insurance excludes coverage for employment-related claims. And most comprehensive real estate general liability policies specifically exclude employment-related claims. Real Estate firms are especially vulnerable because they usually don’t have a person dedicated to human resources until they reach a certain size level.  And all real estate companies have EPL exposure at almost all times, including:

When they INTERVIEW
When they HIRE
When they DO NOT
When they EMPLOY
When they PROMOTE
When they DISCIPLINE
When they PAY
When they TERMINATE

Here are some facts to also consider:
Currently, plaintiffs win about 70% of all employment cases in California. However, even if you end up in the minority and no award is given the plaintiff, your attorney’s costs can still run well into the hundreds of thousands – or even higher. Employment Practices Liability policies pay these defense costs.  Plus, the average cost of a suit is rapidly on the rise.

In 1997, the median award was $75,000. By 2003, that number had risen to $173,000 – nearly a 125% increase. 

From October 1, 1993 through September 30, 1994, the Equal Employment Opportunity Commission and related state and local agencies received 156 discrimination complaints. As of May 1, 2003, the Equal Employment Opportunity Commission had a backlog of over 100,000 complaints and the average complaint took more than a year to handle.

In 2002 over 13,000 complaints of sexual harassment were filed with the EEOC. Settlements for cases in 2003 exceeded 50 million. Defense costs were several times this number.

Through legislation like the Americans With Disabilities Act and the Family Medical Leave Act, Congress has created new grounds for employers to be sued.

Are There Any Key Coverages a Broker Should Have Built Into It?
Yes!  Coverage can be extended to cover third parties, which is essential for Real Estate firms. This provides coverage for claims arising from allegations from non-employees.