Just released: How to raise venture capital in 2023


2015 Employment Lawsuits: Where are Startups at Risk?


Key Takeaways

Carl Niedbala - Founder Shield
Carl Niedbala

COO & Co-Founder

2015 employment practices lawsuit data is in: which states are at the highest risk?

Every company encounters a hiring situation in which things don’t play out quite as planned.  A candidate is overly demanding or misaligned with the hiring team, an employee didn’t perform as expected or wasn’t a cultural fit…the list can go on forever.  Unfortunately, it’s not uncommon for these problems, once “resolved” by personnel changes, to resurface in the form of complaint letters with employment practices-related allegations.  Discriminatory hiring/firing, sexual harassment, hostile work environment, and so on.

Insurance carrier Hiscox just released a study of 2015 employment lawsuits to see just how common those complaint letters were for employers with under 500 employees (most of startupland!).  You can check out the graphic below, but the punchline is this:

  • Startups often contend with an employment lawsuit risk of 11.7% or higher.
  • Of the major startup hub states, California has the highest risk and is 40% above the national average.  (NOTE: this checks out with our internal data as well)
  • On average, it takes 275 days to resolve an employment dispute
  • Dispute resolution (in whatever form it takes) costs $125,000 on average, although several cases against <500 employee companies were litigated or settled for closer to $500,000.

Check out the map below to see where you fall on the EPL risk scale…and reach out so we can answer any questions!

To learn more, you can always reach out to a member of our team by emailing info@foundershield.com at any time. Or create an account here in order to get a quote for a comprehensive program that protects your business!




Related Articles

talent acquisition for startups
February 15 • EPLI

How Talent Acquisition for Startups Can Impact Risk Management

Talent acquisition for startups can be a deciding factor toward success or failure for the company. This post reviews the intricacies of this endeavor and tips for leaders to navigate it savvily.

EPL Insurance Pricing Trends 2023
June 6 • EPLI

EPL Insurance Pricing Trends 2023

The past few years have caused many employment-related challenges, triggering EPL insurance policies. Here’s what to expect from EPL pricing in 2023.

October 12 • EPLIRisk Management

Valuable Tax Incentives & Credits for Your Startup

Should startup founders consider tax incentives and credits as part of financial savings? Here’s why this strategy might makes sense for your small or mid-market business and how to make it happen.

September 7 • EPLIRisk Management

How to Navigate Post-Pandemic Hiring Trends

Post-pandemic trends can quickly complicate hiring and recruiting practices. Let’s review some of these “new norms” and how companies can embrace the talent war.

employment-related lawsuits
July 28 • EPLIWorker's Compensation

Top 5 Employment-Related Lawsuits [and How to Avoid]

The pandemic and social movements have increased employment-related lawsuits, leaving employers struggling to stay protected against costly litigation. Here are the top suits and how to avoid them.

July 11 • EPLI

Downsizing In Downturns, EPL Insurance Considerations

During downturns, downsizing can quickly trigger employment-related issues. Here are some EPL insurance considerations for small, mid-market, and late-stage companies to keep in mind.