Is Employment Insurance Worthwhile for a Dentist?

Here is a another guest blog from our friend Tim Girard of RK Tongue.
Over the last several months, your hygienist
Jennifer, has been difficult employee. She has missed several days of work, has
taken unscheduled vacations on short notice, and is late for work more often
than not. In addition, her performance has steadily deteriorated and longtime
patients have complained about her attitude.
It was also that time a year when you take your
staff to a baseball game to foster camaraderie among your staff, and as a team
building exercise. When you asked Jennifer to introduce you to her boyfriend,
she became indignant, retorting “He’s not my boyfriend. He’s my roommate”. You
did nothing more than raise your eyebrows at that comment.
After repeated counseling sessions, you concluded
what was inevitable: Jennifer’s employment had to be terminated. Accordingly,
her employment was terminated in a businesslike but sympathetic manner.
Several weeks later, you receive a letter from an
attorney representing Jennifer. The attorney alleges that you wrongfully
terminated Jennifer, alleges “sexual harassment” for referring to her roommate
as her “boyfriend”, and claims that you retaliated against her by firing her
after she corrected you for referring to her roommate as her “boyfriend”. The
damage demand is $200,000.
You retain counsel to respond to these outrageous
allegations. The lawyers confer without resolution.
Thirty days later, you receive an EEOC (Equal
Employment Opportunity Commission) complaint, and a follow up by your State’s Human
Relations Commission.
You refer these matters to your attorney, who
investigates by interviewing you and your employees, and takes their
affidavits. The attorney then crafts a 25 page “position statement” (60 pages
with affidavits and exhibits), which is timely submitted to the EEOC as
required by law.
You then receive the first (and hopefully last) bill
from your lawyer related to this matter. Legal fees thus far are $32,000!
The foregoing story may seem far- fetched. It is
not. It’s crafted from an amalgam of several actual cases. It demonstrates how
even the most careful, caring and conservative practice owner can be ensnared
in a trap that costs either five figure legal fees or six figure judgments.
There is a solution, or at least a work around.
Many Business Owners Insurance policies, commonly
referred to as a BOP, offer some basic Employment Practices Liability Insurance
to insured practice owners, with the ability to purchase additional coverage to
a maximum limit set by the insurance company. Additionally, stand-alone
policies for Employers Practice Liability Insurance are generally available in
the marketplace.
Generally, Employment Practices Liability coverage
pays legal fees and any judgments associated with discrimination, wrongful
termination, sexual harassment, retaliation and other types of employment
practice liability claims, subject to a deductible and a maximum limit of
liability. The cost of the coverage will vary based on the limits, the
deductible, and the broadness of the coverage.
Given the fact that, under the law, discrimination
does not have to be intentional to be unlawful, and given the fact that a
panoply of laws affect Employment Practices Liability loss exposures (Title VII
of the Civil Rights Act of 1964, Civil Rights Act of 1991, Age Discrimination
in Employment Act, Americans with Disabilities Act, Family Medical Leave Act,
Fair labor Standards Act, to name only a few), it makes great sense to consider
transferring most, if not all, this risk to an insurance company in return for fairly
nominal premium dollars.
It’s worth thinking about!

Timothy A. Girard is Vice President of R.K. Tongue
Co., Inc., the Maryland State Dental Association and District of Columbia
Dental Society’s endorsed insurance broker. Tim can be reached at 410.752.4008 ext. 116 or via email at

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