Does Your Liability Policy Include Discrimination?

Discrimination Dictionary Definition

The possibility of a discrimination case being brought against your company is nothing to leave to chance. A discrimination claim against your company can be significantly draining on your financial assets and could threaten your business’ future. Ensuring that you have the right coverage, starting with your liability policy, is as important as any other aspect of your business.

How Can Discrimination Affect My Business?

There are many different ways that discrimination can affect your business. Discrimination against race, age, gender or sexual orientation are common reasons for claims being made against companies. Events that can contribute to these claims could be:

  • Not being given a job.
  • Not being given a promotion.
  • Being fired.
  • Not being offered services or products.

There are times when these seamlessly harmless events can cause massive disruption. Imagine you have two candidates that could be promoted to a new position in the organization and you chose the one with the best production and training. This should sound reasonable; but what happens when the other person was recently pregnant or physically challenged? They could complain that they experienced discrimination.

While not all discrimination cases are successful, it could still tie you up in legal battles, and this can be costly if you aren’t covered.

Not Just The Financial Costs

As well as the financial costs to your business, there are also the productivity costs to your business. Imagine that you have a legal claim against you from a staff member for discrimination. This can have a major impact on how you concentrate, and can lower your productivity, making it harder for your business to generate its normal revenue.

The effects of discrimination cases can also influence how you work with your employees, distancing you and making decisions harder. These communication gaps can also have a major impact on productivity within your business.

Coverage Is Necessary

A key way to protect your business is to have the right coverage. Business insurance can take some of the strain away from you and ensure that you aren’t liable for the costs of representing your business and also, that any fees related to a settlement are made by the insurance company.

They can also handle some of the more challenging aspects of any claims.

Does My Existing Policy Cover Me?

The simple answer is probably not. Although a policy may not have any exclusions related to discrimination, coverage may still not be there. There are two main reasons for this.

Firstly, a discrimination lawsuit may seek damages for economic losses such as back pay, future earnings and benefits loss. However, a general liability policy will usually only cover damages for bodily injury, property damage or personal and advertising injury. As most discrimination lawsuits don’t include this, the claim would not be covered.

If the discrimination claim sought damages for mental anguish or injury or emotional distress, then some liability policies might cover these. But it depends on the wording of the claim.

Secondly, general liability policies cover injury or damage from an accidental event. Discrimination claims often relate to an intentional event, therefore aren’t covered.

You need to look at getting specialized insurance to cover you for discrimination claims.


Discrimination claims in the workplace are not uncommon. They are, in fact, something that employers need to be aware of, and prepare for. Not considering the impact a claim could have on your business could lead to financial uncertainty and threaten its survival. General liability insurance won’t cover you. Instead you need special insurance to make sure you have the right coverage for legal battles and any settlements that come as a result.

Are you covered for discrimination claims in the workplace? Have you suffered a major loss because of a discrimination claim?

Let us know in the comments below.

Posted on: July 12th, 2016 at 10:00am by Brenda Allison. Filed under: Uncategorized
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