Monday, June 24, 2013

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

For more information, please contact

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