Sexual harassment: Will it affect your organization?

The problems that brought the MeToo movement into existence were always there, but now they openly affect entire organizations, corporate officers and company directors.

A 2018 Hiscox Workplace Harassment Study reveals that more than a third of American workers who responded to the survey experienced some form of harassment in the workplace—and sexual harassment topped the list.

According to the study, harassment occurs at companies of every size and type, and is caused by every level of employee. But it’s not limited to people who work at a company. In fact, one out of every five respondents in the study said that harassment came from customers or vendors.

It has always been the organization’s responsibility to address issues of harassment, sexual or otherwise. But what if harassment victims decide that whatever resolution has been offered is inadequate and they choose to sue company officers or the board of directors?

Prevention is the best policy (just not the only policy).
Prevention comes through education, watching for patterns (such as refusing to promote employees based on what appears to be age, race or gender), and acting quickly to handle the potential problems. But you can’t control everyone’s behavior or ensure that sexual harassment will never happen.

Take every complaint very, very seriously.

The Equal Employment Opportunity Commission (EEOC) reports that, since 2010, employers have paid out $699 million to employees who claimed they were harassed because of sex, race, disability, age, ethnicity, color or religion.

Harassment charges can also expose the company and its management team to severe reputational damage, which can negatively affect sales, stock value, your ability to retain or attract key employees, or all of the above.

Are you protected? Really?
Many companies assume their Employment Practices Liability policy covers any issues from a harassment suit. But EPL indemnifies the company against employees suing because their legal rights have been violated.

Directors & Officers Liability protects directors, officers and the organization if allegations arise accusing them of being negligent in their roles.

Talk with your broker.
All reports indicate that the number of MeToo-related D&O claims will increase throughout 2019. So, it seems prudent to ensure that all directors, officers and the company are adequately protected. D&O coverages can vary greatly, so it’s wise to work with your insurance broker to make sure you have the right policy with the right coverage. 

To find out what you need to know, talk with your Marsh & McLennan Agency representative about D&O policies and how they fit into your portfolio.