Sexual Harassment in the Workplace

Sexual Harassment in the Workplace – What Small Business Owners Need to Know

Sexual harassment in the workplace is not limited to just one industry, nor is it a problem for large corporations only. The fact is that it can happen anywhere, from large global corporations to a small mom and pop local shop.

Sexual harassment claims are on the rise, and many of them lead to lawsuits. Larger corporations often already have insurance to cover these claims, but small business owners often do not, and are left with hefty costs. Additionally, even if covered by insurance, there are steps that all companies need to take in order to minimize the chances of sexual harassment claims happening in the first place.

What is Sexual Harassment

Sexual harassment is any verbal or physical actions that are sexually violating and includes using coercion, asking for sexual favors, inappropriate gestures and jokes, and intimidation or bullying that is sexual in nature. Other examples of what can be considered sexual harassment include an employee being in the room while two other employees tell a joke that is of a sexual nature that they find offensive.

Harassment claims are being reported with increasing frequency because there is more awareness of what harassment is.

Preventative Measures Business Owners Can Take

Small business owners can be particularly vulnerable to harassment claims because they do not have a human resources department to handle reports of harassment, or to put in place conduct guidelines and business strategies to help minimize claims.  As a business owner, you are responsible for your employees, and you owe them the duty to provide a safe workplace, free of harassment. By being aware of what sexual harassment is, you can take preventative measures that will decrease the odds of having any sexual harassment in the workplace.

Many small businesses with less than 50 employees do not have any dedicated human resources department or staff. Roughly have had a sexual harassment policy in writing, less than half held a mandatory meeting to address the issue and less than ¼ had actually provided a training session on sexual harassment.

Here is what you can do to provide a positive workplace culture and a safe working environment for employees while minimizing the risk of having sexual harassment claims:

·         Have clearly written policies that outline what sexual harassment is, what will not be tolerated and steps to take for reporting harassment when experienced or witnessed. This can be separate or part of a written employee handbook but you should have a signature page for each employee to sign and keep in the file as a record that they have read and agreed to the written policies.

·         Include in your written policy who complaints should be reported to. It is best to have more than one person named, so employees know they can go to one or more people to report any problems.  Having clearly defined roles helps to enforce the rules because employees already know exactly who to go to make a report. One of the reasons that employees do not come forward is if the only person they are supposed to report to, such as their direct supervisor, is the one doing the harassing. Having more than one option for reporting incidents will help to encourage timely reporting of any incidents.

·         Written incident reports that are promptly investigated are a must. Documentation is a must for any type of claim, including statements from whoever reported the harassment and any witnesses.

·         Confidentiality is vital to employees feeling as if they can safely report incidences. Your written policies should clearly state that reports are kept confidential and that they are protected from any repercussions from reporting a claim. Employees who know that they will not lose their job for reporting harassment are much more likely to come forward.

Protect your Business with Insurance

Claims of this nature often incur large punitive and legal costs, which is a burden for a small business to bear, especially if they do not have insurance. Employment Practices Liability Insurance (EPLI) is a must for any business that has employees or is in the process of hiring employees for the first time. This vital coverage will help protect businesses from large out-of-pocket defense costs and any judgments awarded. While having a zero tolerance policy and reporting procedures is necessary, it should go hand-in-hand with EPLI coverage. Some carriers are including this coverage as part of the Liability, Package or BOP policies and others offer it as a stand-alone coverage.

We have multiple A+ Rated Carriers for EPLI and can write it as a stand-alone policy or part of a package or BOP, depending on your type of business. Many of our carriers also provide resources for putting written policies into place and help with training. If you are interested in a quote, please contact our office to speak to an agent.