In the United States, the Americans with Disabilities Act (ADA) protects the rights of individuals with disabilities in the workplace. In 2022 alone, the Equal Employment Opportunity Commission (EEOC) received over 18,000 disability-related claims. These figures show that ADA compliance is not just an ethical concern but also a pressing legal necessity.
For small and mid-sized business owners—especially in a highly regulated environment like New York—it’s crucial to understand how this law impacts operations and how an Employment Practices Liability Insurance (EPLI) policy can provide critical protection against potential lawsuits.
What does the ADA require from employers?
The ADA requires employers with 15 or more employees to:
- Avoid discrimination against individuals with disabilities during hiring, promotion, termination, or any other employment-related decisions.
- Provide reasonable accommodations, such as schedule modifications, physical or technological adjustments, as long as they do not impose undue hardship on the employer.
Real risks for businesses
Even if there’s no discriminatory intent, miscommunication or poorly documented decisions can lead to claims. Common scenarios include:
- Failing to hire a candidate with a disability without considering a reasonable accommodation.
- Terminating an employee who requested a health-related adjustment.
- Not adapting workplace facilities to accommodate an employee’s disability.
Such claims can result in:
- Significant legal expenses
- Reputational damage
- Financial penalties and compensation
In 2024, staffing firms CPG Staffing and Executive Personnel Group were sued after rescinding a job offer upon discovering, via a post-offer medical questionnaire, that the candidate had suffered a knee injury two years earlier. Despite passing a physically demanding welding test and providing medical clearance, the applicant was rejected solely based on their medical history. The EEOC filed the claim, resulting in a $60,000 settlement and a requirement for the companies to revise their medical forms and train staff on ADA compliance. This case illustrates how seemingly cautious decisions can be interpreted as discrimination under the law. Read the full case
How EPLI helps
An Employment Practices Liability Insurance (EPLI) policy is a vital tool for any business seeking protection from legal risks associated with employment decisions. It extends beyond basic contract disputes and focuses on safeguarding employers when fundamental rights—such as those protected by the ADA—are at stake.
This coverage can include:
- Legal fees and attorney costs related to lawsuits alleging ADA violations—even if the employer is ultimately found not liable.
- Settlements or out-of-court agreements, which can prevent costly and lengthy trials.
- Investigation and defense costs in proceedings involving agencies like the EEOC, including audits and document requests.
- Specialized crisis management support, helping business owners manage communications, internal actions, and legal steps to minimize damage.
Some EPLI policies may also include support for implementing best practices, training programs to reduce future claims, and access to legal consultation hotlines. Having this type of coverage enables employers to act confidently and reinforces their commitment to legal compliance.
Practical tips to protect your business
- Review your employment practices: Ensure your hiring, firing, and accommodation policies are up to date.
- Train your HR personnel or hiring managers: Make sure they understand ADA obligations and how to respond to accommodation requests.
- Secure EPLI coverage that includes ADA-related claims: Periodically review your policy terms to confirm it addresses these risks.
- Document every hiring decision and employment process: Clear records can be critical in defending against a claim.
- Consult regularly with a legal advisor or insurance broker: Stay informed about regulatory changes and adjust your practices accordingly.
Conclusion
Complying with the ADA is not only a legal obligation but a way to build an inclusive and fair work environment. At Rondon Brokerage, we’re here to help you stay protected with employment practices liability insurance designed to meet the unique needs of your business. Contact us to explore your options and ensure your policies align with today’s legal and operational demands.
