Discrimination and Your General Liability Coverage

Discrimination and CGL Policies

What Does General Liability Cover?

Commercial general liability (CGL) is a type of insurance policy that provides coverage to a business for bodily injury, personal injury, and property damage caused by the business’ operations, products, or injuries that occur as the result of the business operations. Commercial general liability is considered comprehensive business insurance, though it does not cover all risks a business may face.

These policies have different levels of coverage. A policy may include premises liability coverage, which protects the business from claims that occur on the business’ listed physical location. It may also include coverage for bodily injury and property damage that is the result of a finished product or service done.

What is Discrimination

Discrimination is the unfair or prejudicial treatment of people and groups based on characteristics. The most commonly discussed categories of discrimination are race, color, religion, sex (including pregnancy, sexual orientation, or gender identity), national origin, age (40 or older), disability and genetic information (including family medical history).

Why Is Discrimination Not Covered Under CGL?

Imagine you are looking to promote one of your employees to a managerial position. Suzie is young and newer to the team, but has a go-getter attitude and you believe she is the right fit. You announce Suzie has been chosen for the position and you believe strongly in your decision and the impact you feel it will have on the company as a whole.

Soon after announcing Suzie’s promotion, you get a lawsuit from another employee, Steve, claiming age discrimination. Steve has more education, more experience and has been with the company longer than Suzie. He is asking for $40,000 in compensation for the difference between his current pay and benefits, and those he would have received had he been promoted.

Using this example, even if your policy does not specifically exclude discrimination, there are two main reasons why your claim could be denied under your commercial general liability policy: it’s not a covered injury as intended by the policy form and it’s not accidental.

Not A Covered Injury

Steve’s lawsuit is asking for reparations because of damages for economic losses like back pay, loss of future earnings, and lost benefits. A commercial general liability policy normally covers claims including damages for bodily injury, property damage or personal and advertising injury. Steve’s lawsuit does not allege the company for a covered injury.

Not Accidental

General liability policies cover injury or damage that results from an occurrence (accidental or sudden event) and discrimination doesn’t usually occur accidentally. Rather, discrimination results from intentional acts committed by employers.


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What Policies Cover Discrimination?

Usually, discrimination does not fall within the coverage terms of the commercial general liability policy and may even be specifically excluded. Employment practices liability insurance (EPLI) covers a variety of employment-related claims, normally including discrimination.

EPLI may provide protection against many kinds of employee lawsuits, including claims of:

  • Sexual harassment
  • Discrimination
  • Wrongful termination
  • Breach of employment contract
  • Negligent evaluation
  • Failure to employ or promote
  • Wrongful discipline
  • Wrongful infliction of emotional distress


Questions? Want to learn more? Here’s 4 easy ways to reach us:

Phone: 951-600-5751
Email: insure@siaonline.com
Text: 951-482-8144
Web: www.siaonline.com

PS Here’s a few words from one client that trusts Stromsoe Insurance Agency:

“I have dealt with Stromsoe Ins for 13 years.  They have been outstanding in customer service and finding me the best policies for my needs.  I regret having to say good-bye as I say hello to retirement.”
Robert Siever – Gasket Pro – Costa Mesa, CA – Client Since 2014

PPS Every policy is backed by our iron clad, 100% complete satisfaction guarantee. Ask for your copy today!

Business Owners: Proprietary HR Program – Limited Time Offer!

Helping Your Business Change
For The New Reality…
What Is Your Business Doing To Prepare For The Changes?


Life has changed for all us.  In these times of uncertainty, more than ever, we are dedicated to the Core Values in our agency.  At the top of our Core Values is:

Servants Heart: Dedicated to serving our clients and communities!

For a limited time… Stromsoe Insurance Agency is giving our Business clients access to our proprietary HR Program … you will receive the first year at NO cost!

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If you have any questions or would like to learn more, please contact the Stromsoe Insurance Business Protection Team:

Phone: 951-552-7236

Text: 951-482-8144
Email: insure@siaonline.com


Don’t Take Our Word For It… Here’s What Clients Who Trust Stromsoe Insurance to Protect Everything They Work So Hard For Have To Say:

“No other organization we have ever dealt with has the depth of resources that Stromsoe Insurance and their teams have. For all of our businesses, every step of the way, they make sure our risk management, safety, HR and protection are all current. 100% recommend SIA!”
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“We are so pleased with your organization; it makes our job so much easier to have people like all of you to work with. I recently shared this with another local business owner, we both praise you guys to the hilt!”
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Stromsoe Insurance Gives Back To Our Business Community

This is Mike Stromsoe, President and Team Leader at Stromsoe Insurance Agency. Life has changed for all of us, and in these times of uncertainty more than ever, we are dedicated to the core values in our agency, and at the top is a Servant’s Heart: We are dedicated to serving our clients and our communities, especially in times like this.

We want to give back, so Stromsoe Insurance Agency is giving businesses access to our proprietary HR system. You receive the first year at no cost. We’ve used this system for years. It’s top notch and it provides information on a national basis regardless of where your business operations take you.

To learn more give us a call at 951-600-5751 or email us at insure@siaonline.com. Stay safe, stay well and stay healthy!

Want to learn more about SB 1159? Watch the Q&A with Daneen Ashworth from Compass HR.

Looking for other resources for business?


Questions? Want to learn more? Here’s 4 easy ways to reach us:

Phone: 877.994.6787
Email: insure@siaonline.com
Text: 951-482-8144
Web: www.siaonline.com

PS Here’s a few words from a business that trusts Stromsoe Insurance Agency:
“Stromsoe Insurance Team is amazing, if every company that I worked with would operate like them, Los Angeles truly would be called city of angels.”
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PPS Every policy is backed by our iron clad, 100% complete satisfaction guarantee. Ask for your copy today!

Mobile Devices Pose Data Breach Threats

With the ever growing use of tablets and smartphones in the workplace the risk of exposing more and more businesses to liability for sensitive data being compromised if these devices are lost, stolen, or hacked. How can your company protect itself against this threat – and how much authority do you have over an employee’s personal device if it’s also used for work-related activities?

What’s more, because these gizmos are small and portable, it’s easy to misplace them. (The federal Transportation Safety Administration recently leased a warehouse just to store those misplaced or left behind at airports.)

Another emerging risk linked to these devices is a “bring your own” policy that many companies have adopted as a way to save costs by having employees spend their own money on smartphones and tablets that are constantly evolving and updated. This approach raises questions about separating company data from personal information on the device. For example, when an employee leaves, does a business have the authority to wipe the information from his or her smartphone? According to some authorities, if an employee connects a personal device to a company network, the company has inherited responsibility for the data stored on it.

To deal with this risk, you need to provide every employee who uses these devices with training, updated annually, on how to respond in case of loss or theft. To minimize potential liability for lawsuits by customers and clients, make sure that the individual responsible for the mishap informs management immediately. The compromised information might include everything from sensitive data (financial or medical) contacts, photos, call history, personal notes – you name it.

You can also use insurance to protect yourself against losses from data breaches. A policy will provide Liability coverage that deals with legal costs and third-party expertise (such as forensics firms to analyze a breach and call centers to provide information and public relations. Coverage might also include services such as access to tools to estimate costs, a checklist for your planned response to a data breach, and access to experts who can answer questions and review your company’s policies and procedures.

For more information, feel free to give us a call. (877)994-6787

Employers struggle to control wage-and-hour litigation

Wage-and-hour lawsuits are becoming a major concern for employers as more suits are filed, observers say.

The complexity of federal and state laws, the relative ease of winning class action certification and workers laid off as a result of the weak economy have led to more litigation in recent years, observers say.

For example, the Department of Labor said there were 40,000 wage-and-hour complaints during fiscal 2010, up about 15% from the roughly 35,000 complaints in fiscal 2009.

Many claims fall into two major categories: misclassification of workers as exempt, and unpaid overtime, observers say.

However, employers can minimize the chances of litigation by taking steps that include periodic audits to determine whether employees are being properly classified, as well as careful record-keeping.

When employers are sued, experts say settling the case may be the wiser course.

Wage-and-hour litigation is the fastest-growing type of class action, legal experts say.

“If you asked me what was the headache that kept folks up at night five years ago when it comes to workplace-related lawsuits, I’d say employment discrimination lawsuits,” said Gerald L. Maatman Jr., a partner with law firm Seyfarth Shaw L.L.P. in Chicago.

“Today, the headache that keeps people awake at night” is wage-and-hour litigation, he said.

“If you’re interested in saving money and avoiding the courthouse, I think that’s the No. 1 issue right now,” Mr. Maatman said. “Every year we think we’re at the top of the bell curve, but we haven’t reached that yet.”

“It’s one of the biggest threats to employers from an employment law standpoint,” said Brian T. McMillan, a shareholder with Littler Mendelson P.C. in San Jose, Calif. “Plaintiff attorneys have kind of stumbled upon what is now the litigation du jour,” which can mean “enormous liability” for employers as well as plaintiffs’ ability to recover attorney fees, he said.

Among reasons for the lawsuits’ growth is establishing a class action under the Fair Labor Standards Act is relatively easy under the federal rules of civil procedures, said Paul J. Siegel, a partner with Jackson Lewis L.L.P. in Melville, N.Y.

The FLSA, which was created in 1938 to protect industrial workers from exploitation, guarantees employees time-and-a-half-pay for hours worked beyond a 40-hour week, unless they are salaried and fall into one of three main exempt categories: professional, executive or administrative.

Observers say even if the time at issue is just a few minutes per worker, a class action can add up to substantial costs for employers when multiplied by thousands of workers.

“While hopefully few people are discriminated against, everybody receives a paycheck, and therefore can be in a group together,” Mr. Siegel said.

“Success begets copycats,” Mr. Maatman said.

Successful litigation in the early part of this decade has attracted attorneys to the area, Mr. Maatman said. In addition, plaintiffs attorneys realized “it didn’t take money to be able to bring these sorts of cases” the way it does to bring large-scale cases alleging discrimination or violation of the Employee Retirement Income Security Act, where plaintiffs must invest in expert testimony and pay for it from their own pocket, he said.

Expert testimony unnecessary

“They can do without an expert” in wage-and-hour suits and “can get a class certified pretty quickly,” Mr. Maatman said. “So when a client walks into their office and says, “This is how I was paid,’ they can sue on behalf of that client and anyone else in the common payroll system,” he said.

Furthermore, unlike discrimination cases that must first be presented to the Equal Employment Opportunity Commission, a plaintiff attorney can see a client on Monday and file suit on Tuesday, said Mr. Maatman. It is a “much, much more user-friendly system for the plaintiffs’ system,” he said.

The weak economy also has played a role in rising litigation as laid-off workers go after their previous employers, said Lawrence S. McGoldrick, of counsel at Fisher & Phillips L.L.P. in Atlanta.

The complexity of the rules, which vary among the state and federal laws and are easy to inadvertently break, also are a factor, legal observers say.

“There is no turnkey solution that you can just plug in,” said Phillip Schreiber, a partner with Holland & Knight L.L.P. in Chicago.

“It’s hard to be in full compliance, even for a good employer,” Mr. McGoldrick said.

“When you consider whether or not an individual is properly classified as an exempt vs. nonexempt for overtime, it’s nothing that they can just look up and get a definitive answer for,” Mr. McMillan said. “The decision rests upon a specific case-by-case actual analysis as to what the particular employer does day in and day out, so it’s difficult, even as a lawyer, to provide guidance.”

The nature of today’s jobs also is a factor.

“You have employees who are not working in centralized locations where they can be monitored” and their hours worked tracked easily, said Michael C. Schmidt, a member of law firm Cozen O’Connor P.C. in New York.

Working with email and BlackBerrys “tend to be outside the traditional norms, which makes it harder for employers to control and record those” specific hours worked, he said.

In addition, budget-stretched state and federal governments are targeting independent contractors to make sure the contractors pay their fair share of payroll taxes. They are not just looking to do justice but “also seeking to get back revenue,” said Mr. Schmidt.

The Labor Department also has been active on the issue, observers say.

Location matters,

The employer’s location also makes a difference, legal experts say.

“An employer needs to consider where in the country your facilities are located,” said Mr. Siegel. “If you’re in California, if you’re in Florida or New York City, you’re going to see far more” wage-and-hour activity than in other parts of the country. In some cases, it is a reflection of local laws; and in others, of the local bar, Mr. Siegel said.

Many point to California as being particularly difficult for employers.

Mr. McMillan said the state “has just so many specific wage-and-hour rules and regulations that a lot of employers that have all the intent of wanting to comply with the law don’t often know about all the specific rules, and therefore it’s difficult for them to comply with all the technicalities.”

Insurance coverage is not widely available, observers say. According to a December study by Sterling, Mass.-based Betterley Risk Consultants Inc., some insurers offer only defense coverage or defense and settlement insurance, but both often are subject to sublimits.

If you have questions, comment or concerns regarding this article or your insurance program, please contact one of our protection coaches at 877-994-6787 or email us at insure@siaonline.com.

Prevent Employee Claims of Invasion Of Privacy…

It’s not easy being an employer. The business must offer competitive wages and benefits without over-paying. It must keep employees happy but still maintain workplace discipline. It must protect its customers and its assets without seeming to distrust its employees. Without being overbearing or acting as a strict parent, it must ensure that employees are doing their work and doing it well. Many employers, using modern technology, are keeping an eye on workers — literally. A 2007 study by the American Management Association and The ePolicy Institute revealed that:

  • – 66% of employers monitor employees’ Internet connections
  • – 65% use software to block employees’ access to some Web sites
  • – 43% monitor employees’ e-mail
  • – 45% monitor the time employees spend on the phone and the numbers they call
  • – 16% record employees’ phone conversations
  • – 9% monitor voice mail messages
  • – 7% monitor employees’ job performance using video surveillance


Also, in certain industries employers search workers’ workstations and lockers, perform drug tests and physicals, investigate their backgrounds, and even monitor their activities outside of work. When an employer disciplines or fires a worker based on information it learned through one of these methods, the worker might become angry enough to sue the employer for invasion of privacy. Although federal and state laws generally permit employers to monitor workers’ activities and use of employer property, some suits succeed and all of them divert financial and human resources away from the employer’s main business. There are several things employers can do to avoid this.

  • >> Establish a workplace policy about non-business phone and Internet use, and include it in the employee manual. The policy should describe the extent to which the employer will monitor phone and Internet use, if any, and the consequences should employees violate the policy. Ensure that employees are aware of it by discussing it at staff meetings and asking them to document that they have read it.
  • >> Be careful about audio recording conversations. Although state and federal laws generally permit employers to use video monitoring of employees, some restrict the ability to make audio recordings or to listen in on conversations. Employers should become familiar with the wiretapping laws in their states before using audio monitoring.
  • >> Keep employee e-mails confidential. Employers have the right to monitor their employees’ use of the business e-mail system, but making e-mails public (absent some legal or business requirement) might violate employee privacy rights.
  • >> Include in the employee manual a written policy regarding employer searches of desks, workstations, and lockers. This should describe the employer’s right to conduct searches, the reasons it may do so, and the consequences should an employee refuse to cooperate. Conduct searches only when absolutely necessary for business or legal reasons, and take care to respect the employee’s dignity by doing the search out of the view of other employees.
  • >> Perform drug tests for legitimate business reasons and at appropriate times, such as during the hiring process and following a workplace accident. If the employer will administer random drug tests, it should have a written policy stating as much in the employee manual and it should conduct the tests with as little privacy infringement as possible.
  • >> Obtain a job applicant’s written consent for a background check, and investigate only those factors relevant to the position. For example, a credit check might be appropriate for a position that requires handling money.Keep employee information safe from individuals outside the company. Instruct managers and staff not to discuss personnel matters with outsiders and employees who do not need to know the information.

Employers must run an efficient operation, maintain a safe workplace free of harassment, make employees feel comfortable in their work, and make a profit. Following these steps will reduce the chances of employee lawsuits and allow the business to focus on its core mission.  If you have any questions regarding any items mentioned throughout this article, call 951-600-5751 and ask for Mike! We have easy to implement solutions that can help you with all of these matters today!

Employee Substance Abuse & The Affect On Your Company’s Bottom Line

More than ever, some of your team may need you help. Here’s some info to consider:

Employees with substance abuse problems cost businesses billions of dollars each year. According to the 2008 National Survey on Drug Use and Health, among the 17.8 million Americans aged 18 or older who admitted to illicit drug use, nearly 73% were employed. This equates to 12.9 million employees who admit to some form of substance abuse.

For the majority of substance abusers, their problem lies with alcohol. According to information published by Ensuring Solutions to Alcohol Problems, a part of the George Washington University Medical Center, alcohol abuse costs American businesses $134 billion in annual losses. Most of the losses are due to missed work: 65.3% of this cost is caused by alcohol-related illness, 27.2% due to premature death, and 7.5% to crime. People addicted to alcohol also spend more time in the hospital and have higher rates of job turnover than their non- or light-drinking co-workers.

Data such as this shows that alcohol and other substance abuse takes a toll on workplace productivity, and contributes to higher medical costs both for treatment of the addiction and for substance-related medical issues. Employee substance abuse problems also cause an increased occurrence of workplace accidents and higher Disability and Workers Compensation costs. There is no question that it is in an employer’s best interests to find ways to minimize the impact of employees’ substance abuse on the workplace.

Experts in the field stress that it is imperative that employers educate employees about the health hazards of substance addiction and encourage employees to seek early treatment of any problems. While stressing the importance of a drug-free workplace, policies that rely primarily on discipline can result in addicted employees hiding their problems out of fear of losing their jobs, and in co-workers enabling such behavior in a spirit of friendship. In this type of environment, an addicted employee might resist seeking assistance — such as obtaining treatment under the medical plan or taking a leave to enroll in a treatment program — until a crisis occurs.

On the other hand, employees will be more likely to seek the help they need if they believe that by doing so they will receive help, not punishment. The same is true of co-workers, who can be a valuable resource in encouraging addicted employees to ask for help and to stay committed once treatment has begun.

Since substance abuse is truly a medical problem, most medical insurance plans include at least some substance abuse benefits. Workplace communications about a business’s policies on alcohol/drug use should include this information. If employees realize that help is within reach, they are more likely to seek solutions to their problem. Some employees might not realize that this benefit is available to them. Employee Assistance Programs (EAPs) can also offer screenings, counseling, and treatment referrals for employees with substance problems. Depending on the individual EAP design, it also might have worksite awareness and supervisor training programs.

Employers should make employees aware that any communications regarding substance abuse issues are confidential. This, together with a supportive (instead of punitive) environment, increases the likelihood that employees will ask for help.

With so many dollars wasted in lost productivity, the incentives for a business to promote substance abuse awareness are compelling. And, because work is such an important part of most people’s lives, the workplace can be an effective place for substance abuse intervention to begin.

For more information on our proprietary program for business owners, HR That Works, contact Raimie Brown at 877-994-6787 or raimieb@fallbrook.com


Today near San Diego, a recently fired casino employee killed another and took his own life at the scene of his previous employment.  

On average, 20 workers are killed each week on the job, making homicide the second leading cause of death at the workplace (after motor vehicle accidents). Additionally, an estimated million workers are non-fatally assaulted each year, according to data from the National Institute for Occupational Safety and Health, a division of the U.S. Centers for Disease Control and Prevention. Though the vast majority of workplace violence is related to robbery and perpetrated by individuals from outside a business, about 9% involves co-workers or former employees. 

Workplace violence committed by current or former employees has a devastating impact on a business and its employees. Although the real and immediate injury to the victim(s) delivers the biggest blow, the business itself can suffer bad publicity and, likely, an expensive lawsuit. Regardless of whether or not workers who were not involved in the incident witnessed the event, many are likely to experience emotional after-effects.

What are the causes of workplace violence? According to a guide published by the Minnesota Department of Labor & Industry, workplace violence can occur at any business, because the business environment is not the only trigger of brutal incidents. Family stress, substance abuse issues, and an employee’s overall psychological status, can carry into the workplace and provoke an incident of violence. Other situations that can lead to tragedy include an employee developing an unrequited crush on a co-worker, being rejected for a promotion, or feeling they are treated unjustly by a supervisor. In some cases, an individual cannot handle the resulting feelings of rejection appropriately. The pressure to produce and/or fear of layoffs can also trigger violence in an unbalanced employee.

An analysis by USA Today of 224 incidents of workplace violence committed by employees concluded that, in 80% of cases, the employee had exhibited clear warning signs of possible violence, which were ignored or minimized by supervisors or co-workers. Although some red flags of violence are clear — such as wielding a weapon or making verbal threats — others are less obvious. Experts in the field urge caution when the following behaviors are present:

  • Continuous complaints of unjust treatment
  • Inability or unwillingness to be held accountable, as well as the need to place blame on others
  • Difficulty in accepting criticism
  • Deterioration of job performance
  • Mood swings or personality/behavioral changes
  • Emotional outbursts

Although workplace violence cannot be eliminated completely, businesses can take action to lessen the chances that an incident will take place. Supervisors, managers, and all other employees should be made aware of actions and attitudes that can indicate potential violence. Companies need to make it perfectly clear that non-physical precursors to violence — such as bullying, intimidation, aggression, and threats — will not be tolerated. Policies should also encourage employees to report such red flags, with reasonable assurance of their personal safety. Managers and supervisors require training in how to diffuse workplace tensions effectively and deal with confrontations before they turn violent. Employee Assistance Programs (EAPs) or other counseling services can be helpful in taking these steps.

Give us your comments on how yoiur keep your workplace safe and free from violence.

Please contact any of our protection coaches for more information and tools to help your business:

Phone – 877.994.6787
Email us – insure@siaonline.com
Web – www.siaonline.com

I-9 Guidelines for Your Business

Click this link http://bit.ly/2vUwZS  for helpful information to keep your business compliant and moving forward concerning I-9 guidelines. If we can help with any other HR needs, please contact any of our protection coaches today at 877.994.6787.

Plesae send your comments if this helps you.

We appreciate this opportunity to help you.