Employment Practices Liability Insurance: A Critical Ingredient for Sustained Business Success

By Phil Chavez, Strategic Insurance Consultants

Today’s business leaders have enough to juggle without the added stress of employment practices liability. Unfortunately, employers and other business leadership are now more vulnerable to employment practices suits than ever before. In fact, according to Bloomberg BNA, employment-related lawsuits recently reached a record high, with more than 7,000 cases filed in the year-long period ending in March 2012. And the Dayton Business Journal explains that they grew 35 percent between 2007 and 2010 alone. Meanwhile, other estimates suggest roughly three out of every five employees will sue their employer at some point—it can happen in any size business no matter how careful you are.

This clear upward trend is due in large part to the economic climate—more layoffs and increased economic concerns mean more concerned individuals are looking for a new cash stream.

Fortunately, business leaders can protect themselves from this growing threat with employment practices liability insurance.

What You Need to Know About Employer Employee Liability

Before we discuss the value of this particular form of coverage, we’ll walk you through the key points of employment practices litigation. Suits alleging violation of the Fair Labor Standards Act, also referred to as the Wages and Hours Bill, are the most common and easy to track—they are indeed the source of the statistics mentioned above. But a series of other laws apply to business leadership, too, including the Civil Rights Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, and the Family Medical Leave Act.

Together, that legislation may give all your employees—past, present, and future included—grounds to allege that you or other business leaders have abused their rights as individuals and employees. This means your entire business is held responsible, including directors.

There are several grounds for litigation. Many are based on the simple fact that the FLSA is outdated, coupled with outdated state law provisions, which can make it difficult for employers to properly classify employees as exempt or nonexempt. This misunderstanding can be extremely costly, considering that uncompensated “work” performed off the clock can be grounds for suit years after the fact. Other potential grounds for litigation focus around questions of discrimination, which, as difficult as they may seem to prove or disprove, can take a heavy toll on your bottom line. Questions of wrongful termination are also common, with multiple forms of legal grounds.

Unfortunately, even if your leadership team is made up of only the most trustworthy individuals, every single director has the potential to be a target for a suit no matter how good their intentions may be. And even if you are able to prove innocence in a court of law, the expenses of mounting legal defense are costly.

This all changes when you have reliable employment practices liability coverage.

Finding the Right Employment Practices Liability Insurance for Your Business

The bottom line is that litigation alleging wrongful employment actions is costly and difficult to address—and instances of it are on the rise. That means that nowadays, a strategic business plan must take employment liability risk into consideration. The loss you might face from even a single suit filed by a single employee—current, past, and potential—could itself be devastating. Multiply that by current trends and you can see the clear importance of protecting yourself from this liability.

The best forms of employment liability insurance will cover all your directors and officers. A comprehensive insurance plan will protect you against allegations and, when necessary, mitigate damage.

It is all part of maximizing your business success by lowering the total cost of human capital and maximizing your return on investment.

Talk to your insurance provider about their employment liability solutions. Or, for a quote on cost-effective coverage that services your bottom line and enhances your risk management, contact Phil Chavez, Strategic Insurance Consultant, today.

Even business owners need to recharge


This week, I was fortunate to be able to take some time and watch the USA Procycling Challenge with my family. We spent a few days in a very friendly hotel in Aspen, drove through gorgeous Glenwood Canyon, and ended the week at Denver City Park watching the bicyclists finish the race. It made me think about a few business issues that all small business owners need to think about:

1. Location matters. At Flagstaff Mountain, there was someone at the base of the mountain selling cowbells for $5.00. My husband realized he had to have one. Even though my son got one for free in Aspen (thank you State Farm guy!), my husband decided that it was important for him to have one on Flagstaff and this was his opportunity. The people were making a killing because they knew that location mattered and those eager to join the festivities up the hill would pay the price they were asking.

2. Opportunities abound. I was shocked that at Denver City Park, no one was offering food or drinks for sale. If I had been a street vendor (even one of the guys with the cart that sells ice cream), I would have been there in a heart beat. The temperatures reached over 90 degrees and there was no one selling food (at least in the area we were in). There was a missed opportunity for someone that wanted to make a lot of money. I would have bought ice cream for both me and my son! (And maybe my husband, but he did get a cowbell the day before so maybe not.)

3. Taking time off can be good. Anyone that knows me, knows that I work a lot. Whether it is teaching seminars, meeting with clients, or writing that last minute contract (or blog post), I am typically doing something work related. This is the first time in a long time that I have taken off multiple days in one week (and okay, I’ll admit I scheduled a few things and did work the first part of the week). Every business owner needs to take a few days here and there to recharge. Whether you recharge by watching bicycling races, ballets, or gardening, you need to have some time to not think about work. Yes, you can cheat a little bit. However, as a business owner you will work more hours than you ever imagined – make sure that you work to live and not live to work all the time!

Next time, I’ll write about something a little more legal. But for now, this post is the last of the vacation of your small business lawyer! If you need legal help, please call or email me, your small business lawyer, at 720-258-6647 or elizabeth.lewis@eclewis.com.

Happy New Year Video

Happy New Year from the Law Office of E.C. Lewis P.C..  Welcome to our first video post!  We hope you enjoy it!  If there are topics you would like to see addressed in the future, please make sure to leave a comment.  As always, if you need specific help, please feel free to call me, your Denver business attorney, at 720-258-6647.

Happy New Years and Happy New Website!

If you haven’t been to the home of your small business attorney recently, then you have probably noticed some big changes!  As you can see, the website has been completely redone.  You can now find the newest stories on the homepage.  You can still find all the posts on the blog page.  This year, each month will have a different theme with articles posted about top tips for you to have the best business year ever!

So make sure to check back to find out if there are new posts that will help you!

If you have comments about the new look, please let me know!

Guest Blog: Starting a Business – the Mac Version (part 2)

The following is a guest post by Kevin Cullis.  For more information on Kevin, including his blog on all things business and Mac, please visit his site at www.macstartup.com.

Any business requires certain elements and steps to get off the ground: business planning, project planning, marketing, sales, finance, and business operations, each element designed in a system to be effective at satisfying a customer and then efficient with the results of being profitable.  The most opportune steps to getting to the point of finding a Mac solution is primarily to determine the business case, process, or pain point and then secondarily finding a Mac solution.  What a typical startup business owner does is have the tendency to jump to the Mac solution before clearly defining the important business reasons for needing a solution or even spending the money.

For example, when I was writing my book How to Start a Business: Mac Version almost every editor, graphic artist, or book expert stated that I needed to do my book in Adobe’s InDesign or Quark’s QuarkXpress, both cost $700 for a single software license.  I could not afford them nor did I want to.  I decided early on to see if iWork Pages, Apple’s $80 office suite, could do the job.  One important aspect that needed to be answered was about leading (rhymes with heading), line spacing measured in points, not the typical single or double spacing we’re all accustomed to using.  Once I learned that Pages could do “12 on 14” leading, 12 point font size with 14 point spacing for book design, I catapulted my book’s PDF off to the printer for my proof copy.  It worked!  As my grandfather used to say, “Pay enough to get the job done,” and Pages was “good enough” for the job I needed, I could now redeploy my $620 in financial savings toward something else.

Once you’ve defined the business elements and components that go into starting a business, and necessarily the intended size and quality of the business requirements, now it’s time to determine what Mac solutions and cool tools are needed.

  • Marketing.  Free with every Mac is Apple’s iLife, made up of GarageBand (music and audio recording), iPhoto (photo management and editing), iMovie (video, and can combine both audio and photos), iDVD (sharing of digital files), and iWeb (designing simple web sites).  Beyond iLife, a startup mostly needs a copy of the iWork office suite made up of Pages (word processing and page layout), Numbers (spreadsheet), and Keynote (presentation) software to handle nearly all of a startups business marketing needs (print, audio, video).
  • Sales.  Moving into sales, the software needs may include: contact management (Apple’s Address Book or Zoho), To Do (Apple’s iCal or Omnifocus), calendar (iCal or Google Calendar), and sales or Point Of Sale (POS) software solutions (Xsilva or POSIM).
  • Operations.  The last pieces of heavy software needed may be financial or accounting (Moneywell or Quicken for Mac), graphics (Lineform or Pixelmator), project planning (Things or FastTrack Schedule), or databases (Bento and Filemaker Pro). At the tail end of the solutions are smaller utilities or applications that make life a little easier that are too numerous to list.

As with any startup the key issue of any Mac solution boils down to: quantity and quality.  From a quantity perspective, how many clients or customers will you have and how many products, services, or transactions will you have?  500?  5,000?  50,000?  These anticipated numbers will narrow down the field of Mac solutions as you consider their capabilities for your specific situation.  The quality perspective will also play into who your ideal clients are.  Will iWork Pages be good enough as a startup solution, or as a graphic artist will only InDesign be worthy of your talents and outputs.  Or as a dog sitter could using iWork Numbers versus Quicken for Mac be good enough to balance your checkbook?  You don’t always needs to best solution to get the job done.

And as for whether you can start a business with a Mac – Survey says: Yes!  A Mac can be used by just about any startup.  As tickets to the 2011 World Wide Developer Conference (WWDC) sold out in two hours and Apple continues to sell progressively more Macs to businesses, growth in solutions for businesses will continue.  This suggests that businesses will increasingly be attracted to the Mac as the platform of choice now and into the future as more and better solutions become available.

Before I left Startup Weekend, I had a chance to discuss the various startup teams and what they were working on with a judge.  As an entrepreneur myself, I mentioned “too bad they couldn’t make any sales over the weekend,” whereas the judge stated, “The one that makes the most profits, wins!”  Profits only follow providing a great product or service, and the Mac does everything to save you time and money while getting it done.  So, just do it using a Mac.

If you need legal help starting a business, please contact me, your Denver small business attorney, Elizabeth Lewis.

Guest Blog: Starting a Business – the Mac Version (part 1)

The following is a guest post by Kevin Cullis.  For more information on Kevin, including his blog on all things business and Mac, please visit his site at www.macstartup.com.

I attended Startup Weekend June 3-5, 2011 in Denver.  Startup Weekend is a 54-hour long event that starts Friday evening and ends Sunday evening having hacked out a business plan and pitched your idea to judges to determine the weekend winners.  It involves all types of people: coders, marketers, people with an idea, or startup wannabes, a whole mixture of individuals.  One of the interesting observations during the event was how many PCs and Macs were in attendance, so the question becomes: Can a startup use a Mac?  The Startup Weekend Mac to PC attendance ratio at this one was about 2:1.  So, do ya think just maybe?

As in any startup, there are two aspects of a business: the craft of a business (writing, law, medicine, mechanic, dog grooming) and then there is the business of the craft (making a profit in those crafts using Mac tools).  There is a general misconception among PC users that Macs are “mainly for graphic artists,” and only a small number of businesses can use them.

Having worked with thousands of businesses selling computers in my career, I can emphatically say that the average startup, mompreneur, or small business can use a Mac in a nanosecond.  There is only the small chance that using a Mac may restrict a business, but it mostly occurs with industry specific solutions, for example architectural, accounting, or medical applications that may not have some of the bells and whistles as a Windows version.  In most cases, there are workarounds for niche software, but in most cases, it is not a showstopper, more of an inconvenience to the Mac user.

Stay tuned for next week’s conclusion of “Starting a Business – the Mac Version”.  And until then, if you need legal help starting a business, please contact me, your Denver small business attorney, Elizabeth Lewis.