We’ve all been witness to the incredible events surrounding the #MeToo movement. The allegations of sexual harassment (and worse) made against Harvey Weinstein led to accusations of wrongdoing against a string of powerful men by their subordinate co-workers. This, in turn, led to very public scrutiny. True or not, these allegations are costly. It stands to reason that the high profile events involving actors, entertainment moguls, anchormen and politicians will create a trickle-down of this type of scrutiny and the potential for allegations in all workplace relationships. This is particularly true in a doctor’s office where there are typically differences in pay, education, gender and age between the doctors and support staff.
Over the past 20 years, we’ve never had a client who was accused of sexual harassment admit that the allegations were true. Still, in every case, lawyers were engaged. The average defense cost for this type of case is in the neighborhood of $40,000 (and that’s if you win). If a dentist doesn’t have insurance coverage for this, the likelihood is that the desire to defend will be replaced by just finding the easiest way out. That usually involves writing a check to the person making the allegation.
Employment Practices Liability Insurance (EPLI) is the only type of insurance you can carry that will address this type of allegation. You likely don’t have it or at least not enough of it. EPLI coverage is designed to defend and indemnify the practice with regard to allegations made by an employee, former employee or job applicant. Around ten years ago, insurance companies that insure dental offices began to include a small amount of EPLI coverage on the office policy, maybe $10,000 or so. That amount can generally be increased but with that increase comes a much higher deductible. Still, the dentist who owns an office should at the very least increase the coverage to something more substantial. It’s not only practice owners who should be concerned. Associate dentists should make sure that the practices they work for carry EPLI as well.
EPLI coverage has been available on its own stand-alone policy for many years now. In fact, originally, that was the only way to buy it. Any dental practice owner who wants the very best protection should consider purchasing a specific EPLI policy. A dedicated EPLI policy will offer higher coverage limits, lower deductibles, and broader coverage than the endorsement to the office policy.
Sexual harassment is certainly the most jarring allegation addressed by the EPLI policy but it’s only one of many situations that the coverage can be designed to address. The common allegations covered by EPLI are related to sexual harassment, discrimination, and wrongful termination. Allegations of discrimination and wrongful termination can be just as costly to defend as those regarding sexual harassment. Generally, you’ll find coverage for all three on both the stand-alone EPLI policy and the endorsed coverage on an office policy. Within the dental community, there are two additional risk situations not addressed by the basic EPLI coverage. The first is an allegation of sexual molestation made by a patient of the practice. A patient is not an employee, former employee or job applicant so, therefore, the allegation is not covered by basic EPLI coverage. Many stand-alone EPLI policies will specifically include defense coverage for molestation allegations made by a patient.
Over the years we’ve seen many cases involving a former employee suing the practice for back pay related to unpaid overtime work. These allegations are usually made by a former employee that was paid a fixed salary for their work at the practice who later challenges their status as an exempt employee. This type of allegation runs a very close second to the allegations of sexual harassment. We refer to this type of claim as a wage/hour dispute and many stand-alone EPLI policies include defense cost coverage for this. Again, the coverage is defense only and the policy will not pay a judgment (actual back pay, interest, and penalty) in a wage-hour dispute but defense costs in all EPLI claims can be significant.
As a dental practice owner, one last thing to keep in mind is that it’s not just your own actions that you are responsible for. The actions of each and every employee or contractor of the practice can lead to EPLI allegations and it is the practice that will be sued and the practice that will be held responsible for the result of those actions.
The right insurance is important but there are other things that you can do to reduce your risk. Make sure that your practice has a written policy with regard to sexual harassment. Eliminate or reduce the instances in the daily practice routine where two employees find themselves working together alone for extended periods of time, especially those involving a dentist and one assistant. Simple changes can make a big difference.