Sexual Misconduct Insurance Coverage Explained

Sexual Misconduct Insurance Coverage Explained

A sexual misconduct allegation can ruin more than a reputation it can also destroy relationships, families and businesses. It’s also estimated that 43% of women in Canada have experienced some form of sexual misconduct by a fellow employee while in the workplace which is an alarming and unacceptable statistic.  Moreover, roughly 10% of men also report having experienced sexual misconduct by employees while in the workplace too.  A level of sexual misconduct is unacceptable, but because if it’s prevalence employers need to understand the reality and risk of what is happening within their businesses and ensure they have appropriate policies, procedures and yes….insurance to help fund an appropriate response should there be an allegation of sexual misconduct within their workplace

How Does Sexual Misconduct Insurance Coverage Work?

Regardless of the validity and/or circumstances of the allegation taking any/all allegations of sexual misconduct seriously and handling them appropriately is critical and alleged sexual misconduct insurance coverage can help. Sexual harassment insurance coverage is typically built into Employment Practices Liability Insurance which is often part of a directors & officers insurance policy.  The sexual harassment insurance coverage extension effectively pays for the legal expenses associated with defending a claim brought against an employee and/or employer by another employee and some products could even pay for settlements or judgments against the employee and/or employer.

Why Is Sexual Misconduct Insurance Coverage Needed?

It is estimated that about one in three Canadian women will experience sexual assault in their adult life. In fact, statistics indicate that 39% of women report having experienced at least one incidence of sexual assault since the age of 16. Sadly and often without the knowledge of business owners, many of these sexual misconduct events occur in the workplace.  Even if an employer had done everything they could to provide sexual misconduct training and awareness there is still a risk of a sexual misconduct event happening which creates significant risk for organizations, hence the value and benefit of sexual misconduct insurance.

We all have a responsibility to fight sexual misconduct and eliminate it, but despite our best efforts incidents of sexual harassment will still occur which is why continued, education, awareness and action needs to be taken to protect people from being victims of sexual misconduct.  Also, because incidents of sexual misconduct occur everywhere, including the workplace, employers have a duty of care that is owed to their employees to protect them from sexual misconduct. In response to this fiduciary responsibility, employers must make efforts to protect their staff and prevention is clearly the best strategy as it ideally would eliminate sexual misconduct in the workplace occurring at all, but sometimes bad things still happen and the actions of an individual within a workplace can create significant financial risk for an employer which is why sexual harassment insurance coverage should be considered.