Donald Trump: “You’re fired”… think twice and insure yourself

As the New York Times covered, Donald Trump elevated the firing of people to an art form, giving him enough notoriety to potentially become the next U.S. President. But letting someone go is much more complicated and risky, especially when those employees don’t have any other place to go. And this is when discrimination and wrongful termination claims arise, even when you think of your employees as “family”. Don’t fool yourself into thinking that a lawsuit from one of your loyal employees can’t happen – it can.

One way to protect yourself is to offer a fat severance check, but that’s tough to afford for many small businesses. Another is to buy employment (practices) liability insurance (EPLI) that covers wrongful termination, discrimination, sexual harassment, invasion of privacy, age discrimination, or retaliation.

Donald Trump

Dominick Reuter / Reuters


The cost of this insurance protection is so minor compared to the cost of having to defend your company from a lawsuit, and that’s not even counting the settlement amount. Let’s say your lawyer, making $300/hr spends just 6 hours to prepare a quick settlement, that would be $1,800. But as you can imagine, we have seen that most of these lawsuits are very emotional and generally take lots of hours (way more than 6), with legal fees going beyond $50,000.

What is the cost of employment practices liability insurance (EPLI)?
A company with ~15 employees will pay around $3,000/yr for employment practice liability insurance (EPLI), and can cover up to $1,000,000 of liability, all depending on the deductibles. When buying this insurance, make sure you have the right to select counsel, the policy covers all appropriate individuals, and that it covers all potential claims – don’t leave yourself vulnerable.