Small business can’t get sexual harassment coverage

[Monica Peper]

My parents own a small restaurant. An employee is filing a civil lawsuit against them due to another employee sexually harassing them (my parents knew nothing about this until the claim was filed). My parents are saying that their insurance not only does not cover them for this type of claim, but also the insurance company is telling them that they cannot add a policy that covers this due to the fact that they recently switched insurance companies and haven’t been with them long enough. Does that make any sense?

 

[BADTROUT]

My parents own a small restaurant. An employee is filing a civil lawsuit against them due to another employee sexually harassing them (my parents knew nothing about this until the claim was filed). My parents are saying that their insurance not only does not cover them for this type of claim, but also the insurance company is telling them that they cannot add a policy that covers this due to the fact that they recently switched insurance companies and haven’t been with them long enough. Does that make any sense?

This part doesn't make sense... If there is anything presently going on a carrier may deny an endorsement or a policy specifically because there is pending litigation. They can also deny adding ANY coverage once a policy contract is in force for many reasons... However, the part where they are saying because they recently switched, or not with them long enough doesn't make sense and I think it's likely a misunderstanding, or the carrier/agency representative misstating the reason it can or cannot be added.

Tossing out a total guess on this, its probably a little of all of the above.

I did find this snippet out there in google it land that may be some solace to them.

Harassment
Workplace harassment laws prohibit harassment that is based on a victims’ color, race, sex, religion, nationality, age, disability or genetic information. Likewise, employees who assist others with their workplace harassment claim, provide testimony to employers in such a context or aid an investigation by the Equal Employment Opportunity Commission are protected. If the complained behavior is sufficiently frequent or severe that a hostile work environment exists or the victim suffered a tangible employment action, the employer can be found liable for workplace harassment. In its defense, if an employer can show that it exercised reasonable care in preventing and correcting any reported harassment and the employee who claims to have been harassed did not lodge a complaint with management, it will not be held liable in most cases.

 

[Monica Peper]

Thanks that is also what I suspect.

Regarding my parents ability to defend themselves, the lawyers are apparently telling them they will probably lose in court even though the harassment was never reported to them. The reason being that they did not have a formal written policy in place. I’m not sure whether to believe the lawyers or not but the situation is very scary for them as they are in their retirement years and could suddenly lose everything they worked hard for 40+ years to save. They are not wealthy by any means.

 

[BADTROUT]

Thanks that is also what I suspect.

Regarding my parent's ability to defend themselves, the lawyers are apparently telling them they will probably lose in court even though the harassment was never reported to them. The reason being that they did not have a formal written policy in place. I’m not sure whether to believe the lawyers or not but the situation is very scary for them as they are in their retirement years and could suddenly lose everything they worked hard for 40+ years to save. They are not wealthy by any means.

I'm no attorney, but, get a new lawyer. Any lawyer that says you are probably going to lose would be dead to me...