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Workplace bullying could spawn new wave of insurance coverage

The likelihood of being bullied doesn’t end when the final school bell rings. Leave behind gym class, school lockers and even the mean jocks like the ones on "Glee," and you still could find yourself taunted and tormented by bosses and work colleagues.

The long-standing attitude that employees need to resolve their own problems is changing as folks realize that bullying doesn’t end in the schoolyard and that anybody can be a victim.

An estimated 53.5 million American adults, or 35 percent, say they've been bullied at work, according to a 2010 poll by Zogby International and the Workplace Bullying Institute. A 2011 survey by CareerBuilder and Harris Interactive found that 27 percent of Americans feel like they've been bullied at work, with the boss being the No. 1 offender. In the CareerBuilder-Harris Interactive survey, workplace bullying was reported by 34 percent of women and 22 percent of men.

liability insurance workplace bullying Given those numbers -- as well as legislative efforts in several states -- insurers, lawyers, employers and others are closely watching the workplace bullying trend, and they're gearing up for more workplace bullying coverage.

Some insurance companies already have included bullying in their employment practice liability coverage. Among them is Chartis. In 2010, the insurance company introduced Employment Edge, an employment practices liability policy that includes workplace bullying within its definition of harassment.

Employment practices liability insurance protects businesses against claims by workers that their legal rights as employees have been violated, according to the Insurance Information Institute. Such claims can include allegations of sexual harassment, discrimination and wrongful termination.

Workplace bullying: 'Hot topic'

No states have provisions related to workplace bullying. By contrast, many states have laws regarding bullying in schools. In 2011, however, lawmakers in more than a dozen states are seeking legal protection for victims of workplace bullying.

“This really is a hot topic," says Joni Mason, senior vice president and employment practices liability insurance product manager at Chartis.

Since California’s first effort to pass the “Healthy Workplace Bill” in 2003, a total of 20 states have tried to pass workplace bullying laws.

In general, this legislation would give victims the right to sue their bullies and employers. Gary Namie, director of the Workplace Bullying Institute, says the legislative efforts are “less a lawsuit magnet” than a way to prevent or reduce workplace bullying before cases wind up in court.

insurance workplace bullying

“Stop the bullying so that you reduce the turnover, the absenteeism,” Namie says. “You take care of workers and provide a safe workplace.”

In announcing results of the CareerBuilder-Harris Interactive survey, Rosemary Haefner, vice president of human resources, offered this advice for victims of workplace bullying:

"If you are feeling bullied, keep track of what was said or done and who was present. The more specifics you can provide, the stronger the case you can make for yourself when confronting the bully head-on or reporting the bully to a company authority.”

Definition of workplace bullying

Mason says one reason that anti-bullying laws haven't been passed is that bullying in the workplace is difficult to define. Some of the common characteristics used to describe on-the-job bullying include verbal abuse, work interference, sabotage and intimidation.

W. Barry Nixon, executive director
of the National Institute for the Prevention of Workplace Violence, acknowledge there's a fine line between bullying an employee and a pushing an employee to perform up to expectations.

Nixon is a member of the Society of Human Resource Management’s Employee Health, Safety and Security Expertise Panel. His group’s definition of bullying emphasizes that it is “repeated malicious verbal mistreatment and/or inappropriate misconduct.” This causes psychological or emotional harm and harms an employee's ability to do his job. In turn, that can damage a company's performance.

If legislation with broad definitions of workplace bullying is passed, Nixon doesn’t believe it will be beneficial for the employer or employee.

“I would see it’s going to be hard for insurance companies to really pick this up as coverage until they get the definition much more refined,” Nixon says. “I would just envision a state putting in a law, but it’s got a fuzzy definition and then … the insurance company is like, 'Well, what’s the definition?'”

Insurance for workplace bullying

The addition of bullying to employment practices liability insurance would not be costly, unless employers face numerous lawsuits, Namie says. If the volume of bullying suits goes up, the premiums for employment practices liability insurance probably would go up as well, Namie says.

Nixon says insurance companies will push employers to establish anti-bullying policies and conduct anti-bullying training to reduce the likelihood of claim payments for workplace bullying.

If anti-bullying laws are passed, Mason says, employers should look at their internal practices to make sure they comply with the new state laws and should step up initiatives to safeguard employees from bullying and other negative behavior. Mason notes that anti-bullying claims that go to court would be unlikely to put an employer in a favorable light in front of a jury.

The inclusion of bullying in employment practices liability coverage will help foot employers’ legal bills in anti-bullying cases, especially if expert physicians are called to testify about physical or psychological harm, says Susan Corcoran, a partner in the White Plains, N.Y., office of Jackson Lewis, an employment and labor law firm.

On the flip side, the legislation proposed in New York, for example, would give an employer the opportunity to correct a bullying situation before an employee could lodge a viable claim, says Corcoran, New York state legislative director for the Society for Human Resource Management.

“That’s good news, because you want to try to avoid litigation and you want to try to quickly resolve things,” Corcoran says.

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