If there’s one way management often falls short in protecting itself from employment liability, it’s in the company’s employee manual. If your Commercial Insurance plan for your business doesn’t include extensive employee manual advising, you could be at risk.
Protecting Your Company
“When you are brought up on charges for just about anything related to employee allegations,” says Paul Mattes, a Vice President and Principal here at Sterling Insurance Group, “the first thing you must provide is a copy of your employment manual. If you don’t have a well-constructed document, you are going to lose in a court of law 90 percent of the time.”
The manual is designed to state formal procedures in the event of employee allegations of discrimination, wrongful termination, harassment, or other allegedly unfair behavior.
Many companies cobble together an employee manual based on something download from the Internet or obtain from another company, not realizing its critical importance. This is “absolutely the wrong approach,” says Paul, because an employee manual needs to be tailored to the specifics of each company and the regulations of the state in which it operates.
Regulations in this area can change quickly and having an out-of-date manual is asking for trouble.
For example, in 2017 the state of California enacted new legislation governing employee contracts for those who live and work within the state. If a company is affected by this new regulation, it may require immediate changes to the employee manual and render older versions obsolete.
What does a manual include?
“The manual is the playbook you follow in the event of a claim,” continues Paul. “Perhaps you first address the alleged perpetrator in a confidential manner and then enact disciplinary measures as specified in the manual.” This helps provide a valid defense in the event of a lawsuit and makes it easier for the affected employee to work, knowing the company is taking action.
There’s substantial difference in how insurance agencies deal with their customers in the employment liability space. Many agencies work in a very transactional mode, operating 90 days before the renewal, quoting new pricing, and perhaps visiting the company and answering questions. Sterling Insurance Group takes a diagnostic and consultative approach in which representatives spend time learning about the compaany and its processes as part of our proprietary “Risk Path” analysis. We then go through a formal audit to ensure that all of the necessary topics are covered and on-staff counsel vets and critiques the contents. “The end result is pretty ironclad,” says Paul.
The Sterling Difference
The best part about our audit? It doesn’t cost a dime. Our compensation is solely driven by the sale of insurance, so the additional risk-consulting services are essentially just a bonus. “When people hire outside counsel to help develop their policies and procedures, it can cost between ten and fifteen thousand dollars. We do it for free as a part of our outsourced risk management program,” says Paul.
“It’s a real boon to employers,” he adds.
Auditing your employee manual is just one way our team at Sterling Insurance Group can effectively manage your risk.
Is your company missing out?
To speak with a certified Risk Architect to review your employment manual, contact Sterling Insurance Group: 888-525-7575.
