Negligent hiring claims are generally rare, but they can be detrimental to your company when they occur. Depending on the situation, these claims can be both costly and harmful to your reputation. For this reason, it is important to understand how these claims work and what you can do to avoid them.
What Is a Negligent Hiring Claim?
A negligent hiring claim is a claim that alleges an employer made a hiring decision that ultimately led to the harm of another person. For example, if an employer hires an individual who hurts another staff member, a customer or any other person who comes into contact with this employee while he or she is on-the-job, a negligent hiring claim may be filed. To win the case, the person filing the claim must be able to show that the employer was aware of the employee's potential to cause harm, or that the employer should have been aware of this potential. For example, if the individual in question has a criminal background that shows a potential for violence but you chose to hire him or her anyway, you may be liable for any harm he or she causes.
Preventing Negligent Hiring Claims
Negligent hiring claims can be costly and damaging for your business. For this reason, it is best to avoid these claims as much as possible. The best way to prevent negligent hiring claims is to avoid negligent hiring practices. Before hiring anyone, perform due diligence to ensure that the individual is not a known risk to your existing employees, customers or anyone else who may encounter your staff. Take the time to review each potential employee’s credentials carefully. Perform a background check, and call the employee’s listed references to ask about prior behavior.
Protecting Your Company
Even with the best preventative measures in place, you still may not be able to prevent every negligent hiring claim. To protect your company in the event that one of these claims is filed, you need to invest in the proper insurance coverage. Employment practices liability insurance (EPLI) covers your expenses when you a negligent hiring claim is filed against you. This type of insurance coverage applies to other claims too, such as wrongful termination, harassment and discrimination lawsuits.
About Axis Insurance
At Axis Insurance Services, we aim to help our customers identify their exposures and protect themselves. Founded in 1999, we offer insurance programs to a wide variety of professionals and industries including attorneys, real estate, healthcare, architects, and more, and also have a wholesale division. We pride ourselves on offering flexible insurance coverage tailored specifically to each customer’s needs. To learn more about our solutions, contact us at (201) 847-9175 to speak with one of our professionals.