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Review insurance policies for legally dangerous exclusions

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in Discrimination and Harassment,Employee Benefits Program,Employment Law,Firing,Human Resources

Issue: A poorly worded insurance policy can spark age discrimination lawsuits.

Risk: If your policy excludes members of a protected class (age, race, gender, etc.), you could face legal trouble.

Action: Review your organization's insurance policies for provisions that could harm certain employee groups.

Make sure you or someone else at your organization with knowledge of employment law probes the fine print of employee benefits plans and other insurance policies covering employees. And if your organization shops around for new coverage, be on the lookout for provisions or exclusions that could limit coverage for certain groups of protected employees.

Recent case: A taxicab company bought a new liability-insurance policy for its drivers. But it didn't realize that a policy provision limited the coverage to only employees from age 23 to 70. (The city required all drivers to carry insurance.)

The insurer told the taxi company that David Enlow, a 72-year-old driver, wasn't covered. So the company fired Enlow.

Enlow sued, claiming age discrimination. A federal appeals court sided with Enlow and allowed the case to go to trial, saying a jury should decide whether age bias played a role.

While the company didn't intentionally buy the new policy to discriminate against Enlow or other older drivers, the reason for the firing stemmed directly from the driver's age. (Enlow v. Salem-Keizer Yellow Cab Co., No. 02-35881, 9th Cir., 2004)

Final note: If you change policies and learn that members of a protected group would be affected negatively, don't fire them without first talking with your employment attorney. Place the worker on leave until you sort out the situation.

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