By VanScoter Insurance | Greece, NY
Workplace drama is nothing new — but what happens when that drama crosses a line and lands your business in legal hot water?
Recently, I came across a great article in the Rochester Business Journal by Patrick Burke, called “Dealing with Difficult Coworkers”. In it, Burke shares eight practical tips for navigating toxic coworkers and references a personal story from early in his own career. It’s worth a read — especially if you’ve ever had to coach a team member through an uncomfortable workplace dynamic.
But as an insurance agent — and a business owner myself — Burke’s article got me thinking about something most employers don’t consider: what if a workplace complaint doesn’t get handled the right way?
Let’s Set the Scene:
An employee reports that a coworker is undermining them — making backhanded comments in meetings, questioning their work in front of peers, and generally making them feel small. Instead of taking action, the manager tells them to “toughen up” and move on.
The issue continues. Tensions rise. And now your business is at risk of:
- A harassment claim
- A hostile work environment lawsuit
- A retaliation complaint if the complaining employee faces negative consequences
Even if no one meant harm, even if the manager thought they were doing the right thing — intent doesn’t matter in the eyes of the law. What matters is how the issue was handled and how it impacted the employee.
So What Does This Have to Do With Insurance?
Many business owners assume their Business Owners Policy (BOP) covers everything — including employee-related lawsuits.
It doesn’t.
Standard BOPs cover things like:
- Property damage
- Bodily injury liability
- Business interruption
But they almost never cover lawsuits brought by employees. That’s a completely separate type of coverage called:
🛡️ Employment Practices Liability Insurance (EPLI)
EPLI protects your business if an employee sues over things like:
- Harassment (sexual or otherwise)
- Discrimination (age, race, gender, disability, etc.)
- Wrongful termination
- Retaliation
- Failure to promote
- Negligent evaluation
Even if the lawsuit is baseless, EPLI helps pay for:
- Legal defense costs
- Settlements or judgments
- Administrative fees tied to employment investigations
Without EPLI, your business pays out of pocket.
Real Talk: It Doesn’t Take Much to Trigger a Claim
You don’t need a viral scandal to get sued. One bad conversation… one ignored complaint… one misstep in discipline or termination… and your business could be looking at a five- or six-figure legal bill.
That’s why we strongly recommend EPLI coverage for any business with employees — whether you’ve got 2 or 200.
What You Can Do Now
✔️ Check your current policy — does it include EPLI?
✔️ Talk to your insurance agent (that’s us!) — we’ll walk you through your risk exposure
✔️ Train your managers — great coverage doesn’t replace good leadership
✔️ Document everything — complaints, investigations, resolutions
Final Thoughts
Workplace conflicts are inevitable. Lawsuits don’t have to be.
Having the right insurance in place — like EPLI — gives you peace of mind, protects your team, and could literally save your business.
Questions about your current coverage? Let’s chat. We’ll help you protect what you’ve worked so hard to build.
