Page 16 - OhioAlaCarteSummer2011

14 www.ohiorestaurant.org Summer Issue

Currently, business is booming at the Equal Employment Opportunity Commission (EEOC) where most restaurant worker actions are filed against employers. In 2010, the EEOC witnessed a record high 99,922 filings – averaging almost 2,000 per state-with awards totaling $412 million. Restaurants are a leading industry for claims. What’s the future trend? According to EEOC Chair Jacqueline Berrien, discrimination continues to be a substantial problem for too many job seekers and workers, and the EEOC must continue to build its capacity to enforce the laws that ensure that workplaces are free from unlawful bias.

If you have a large or growing restaurant operation, Employment Practices Liability Insurance (“EPLI”) is simply not an option anymore. It’s a necessary protection. Yet, the vast majority of restaurants have no coverage.

Brad Toft, an ORA purveyor member and a restaurant insurance specialist at the Kinker-Eveleigh Insurance Agency, recently shared a story with the Ohio Restaurant Association (ORA). He has a client who operates a multi-location fast food franchisee who understands the problem of not having EPLI protection too well.

“I would call it a bad $20,000 surprise, except that this isn’t a surprise anymore,” his client said. “It’s a sad part of doing business. The employee was fired because

he didn’t show up or call in for three days. Now, he’s filing a discrimination claim.”

The client has received several similar threats within 24 months. These threats have ranged anywhere from sexual harassment to age and racial discrimination. Unfortunately, Toft noted that these cases are becoming more frequent.

Westfield Insurance, a leading insurer that provides EPLI in its restaurant policies, estimates that 81 percent of EPLI claims settle for an average amount between $27,800 and $50,200.

According to Toft, smart clients use two separate strategies to protect their businesses; both resulting from their EPLI policy. First, they use Westfeld’s tool kit to prevent claims from occurring. Westfeld provides simple, model business practices and online training so clients can train their employees, regularly reminding them of their professional expectations. Additionally, the company provides its clients with free access to lawyers they can call for advice if they suspect a claim might occur.

Westfield’s clients also rely on their EPLI policy to finance the problems that inevitably arise despite their best prevention efforts. Along with funds to pay early settlements, insurance coverage for legal defense fees is the heart of an EPLI policy. According to Toft, the policy’s

premium is a bargain when compared to a single legal bill. In fact, EPLI costs have held steady over the last three to five years, even though the risk to restaurant operators has increased. To further stretch the value of its policy defense funds, Westfield has assembled a group of specialty employment defense law firms that offer discounted rates for Westfield policyholders.

Toft also offered up one final insider’s tip for those considering buying EPLI protection: focus on defense costs. When considering how much protection will safeguard your business, Westfield Insurance notes that $100,000 will cover the majority of settled claims. They also urge you to have first-party coverage to protect you from your employees in addition to third-party coverage to protect customers and vendors from your employees.

To learn more about EPLI protections and other business safeguards, contact Brad Toft at 513-936-1218 or via e-mail: btoft@ ekinker.com – and request a free copy of his “3 Most Common & Costly Restaurant Insurance Mistakes.”

Brad Toft,

Restaurant Insurance Specialist, Kinker-Eveleigh Insurance Agency

Do You Need Employment Practices Liability Insurance?

Don’t let a $20,000 surprise alert you to the need

Your Membership in the ORA Provides Access to Great Purveyor Offerings