Understanding How New York Employers Handle Discrimination and Harassment Claims Through Insurance
If you’ve experienced workplace discrimination or sexual harassment in New York, you might be wondering who actually pays if you file a legal claim or lawsuit. Is it the employer directly? Or is there an insurance company involved?
The answer may surprise you: Many businesses in New York carry Employment Practices Liability Insurance (EPLI) — a type of insurance that can help cover legal costs and settlements related to claims of discrimination, harassment, wrongful termination, and other employment-related issues.
🛡️ What Does EPLI Cover?
EPLI policies can step in when an employee (or even a former employee) files a claim alleging:
- Workplace discrimination (based on race, gender, religion, age, disability, etc.)
- Sexual harassment
- Retaliation
- Wrongful termination
In these situations, the insurance may cover legal defense costs, settlement payments, or even judgments — depending on the terms of the policy.
⚠️ What Are the Limitations?
While insurance can provide a financial cushion for the business, it’s not a guarantee in every situation. There are exceptions.
If the conduct is considered especially egregious or clearly intentional, such as physical assault or repeated, documented harassment, the insurance company might deny coverage. Insurance policies often exclude coverage for intentional acts or criminal behavior.
In those cases, the employer may be personally responsible for the full cost of defending and resolving the claim.
💡 Who Pays the Settlement in New York Employment Cases?
In some cases:
- The insurance company pays.
- In others, the business pays directly.
- Sometimes, it’s a combination of both.
This distinction can affect how cases are negotiated, how much leverage you have, and how quickly a matter may settle.
📍 Why This Matters in New York
New York State has strong employee protection laws under the New York State Human Rights Law (NYSHRL) and New York City Human Rights Law (NYCHRL). These laws provide broader protections than federal law in many cases. That means more claims may be eligible — and knowing who is financially responsible can help you and your attorney assess the best legal strategy.
Have Questions About a Workplace Claim in New York?
Whether you’re considering legal action or just need clarity on how insurance might factor into your case, it helps to speak with an experienced attorney who understands both New York employment law and how insurance plays a role in resolving claims.👉 Need help understanding your options? Reach out today.