Most do not cover punitive damages. But some experts say having the plans encourages litigation. It makes it a little more enticing to sue because they have insurance. The available policies differ in part because some states ban insurance coverage for intentional acts. I think being insured on these claims can be helpful.
Employers say they're looking for whatever protection they can get.
The increase in litigation all around me got me a little panicky. Many cases also are becoming more financially draining. And employment cases involving civil rights filed in federal court rose from 10,771 in 1992 to 23,152 in 1996. Some blame waning corporate loyalty for the boom in liability insurance. If you look at the employer-employee relationship, it's changed dramatically.