Benefitsblog

Employers Reducing Benefits and Bracing for Litigation

Chubb Group of Insurance Companies has issued its results in the The Chubb 2004 Private Company Risk Survey. You can access the Fiduciary Liability Survey Results here. According to the survey:

• Only 5% of the private companies surveyed reported that a retired employee had brought a suit against the company, directors and officers, and/or benefits plan administrators and fiduciaries within the past few years.
• Almost 1 in 4 executives said that they thought it was likely that such suits would occur this year.
• Two-thirds of the private firms said that they planned to reduce employee benefits during 2004. (The Survey indicates that employee benefit reductions generally increase the risk of a fiduciary liability lawsuit.)
• Over a third of the companies appeared to be taking positive steps to ward off the threat of lawsuits against their companies and fiduciaries.

On the employment practices liability side of things, the Survey came up with these findings as reported in the press release:

One in four privately held companies has been sued by an employee or former employee in the past few years . . . Executives at as many as half the firms surveyed say it is likely that an employee may sue them, their board members and their companies and/or lodge a discrimination complaint with federal or state authorities in 2004. And nearly one-third believe that an allegation or actual case of wrongful termination, discrimination or harassment has the potential to inflict financial or other serious damage to their company.

Posted by B. Janell Grenier at May 26, 2004 09:18 PM