Should companies buy wage-and-hour insurance?

Wage-and-hour lawsuits under the Fair Labor Standards Act have increased by 30 percent in just the last five years, and with the huge changes that took place on December 1, that number is expected to increase even further.

Some companies are buying specific insurance policies to protect them against these claims.

If a business already has an employment practices liability insurance (EPLI) policy, this might not be necessary because these claims may already be covered. However, many EPLI policies specifically exclude coverage for wage-and-hour violations. Other general liability policies might in theory cover wage-and-hour suits, but these insurers are often very aggressive in contesting their obligation to cover such claims after they arise.

Businesses that are concerned might want to review their policies with an employment attorney.