How to Avoid Negligent Hiring Claims

Statistically employers lose 72% of negligent hiring claims. Even if that number dropped to 50% it would still be bad news because the fact is when you get sued, you lose!

You lose even if you win on the merits because you will probably have to pay an attorney to represent you. Then there’s the time necessitated by completing interrogatories, depositions, and numerous other pleadings, all of which take your valuable time and the time of others in your organization. When you stop to consider what you’re time is worth, it’s a no win situation.

Even if your business has a general liability policy, most policies do not provide coverage for negligent hiring or negligent retention. If negligent hiring is excluded from the policy, not only is there no coverage for the claim, nearly as bad or maybe even worse, the legal representation the insurance company would provided at no cost isn’t there either.

A good labor lawyer can charge upwards of $300 an hour. Businesses that have no coverage for negligent hiring have to foot that expense.

Check your policy or contact your agent to determine if you have coverage for negligent hiring and what the limits are. Hopefully coverage will exist. If not, policies that provide basic protection can be obtained at relatively low cost.

Insurance companies get sued for bad faith all the time. They have been, and will continue to be sued even though they pay attorneys with offices on the top floors of glass towers huge fees for advice. Here’s the form the advice usually takes:

If you want to avoid bad faith claims, act in good faith

It doesn’t get much simpler than that. Nevertheless, bad faith claims persist. Apparently some aren’t listening. Maybe they think they can save money by taking too hard a line or by resorting to short cuts.

The reasons are many but the bottom line usually comes down to money. Even multi-billion dollar corporations are looking to cut corners in the interest of saving money. However, when bad faith plaintiffs prevail, the end result in terms of losses usually far outweigh the amount at issue.

In the same way, the consequences of a negligent hiring lawsuit can be devastating, possibly even fatal for businesses with no insurance coverage.

But there is very good news for Florida employers. Those interested in avoiding issues of negligent hiring are now able to gain legal protection.

The State of Florida has enacted a statute that protects employers by literally creating a road map that outlines exactly what an employer can do to gain statutory protection.

That’s right! If employers follow some relatively simple (and relatively low cost) guidelines they will be “presumed not to have been negligent if the background check fails to reveal information that reasonably demonstrates the unsuitability of the applicant for the particular work to be performed or for the employment in general.”

Protected by Florida law. It doesn’t get much better than that!