Embroker Team March 27, 2023 7 min read

Understanding and Combating the Negative Effects of Sexual Harassment in the Workplace

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Employers and business owners have a responsibility to provide a safe and nurturing work environment for their staff. They also have a legal obligation to make sure that their workplace is one that is free of sexual harassment and discrimination of any type.

Not only is the prevention of sexual harassment at work a legal necessity and the morally right thing to do it’s also what’s best for your business. A workplace riddled with cases of sexual harassment and discrimination is very often a workplace marred by low employee morale and productivity.

The 2017 sexual harassment accusations that spurred the Me Too Movement into existence rocked the entertainment industry and the corporate world, bringing to light a culture of sexual harassment present in many industries today. Thanks to the efforts of this movement, huge steps have been made to raise awareness regarding workplace sexual harassment over the last several years.

Companies worldwide are becoming increasingly familiar with the importance of finding effective solutions and creating frameworks to combat this issue. Sexual harassment policies are being re-examined and workplaces are implementing new measures to help combat sexual harassment in the workplace.

But before learning what steps need to be taken towards prevention, business owners and leaders must first identify what type of behaviors can be considered common examples of sexual harassment in the workplace.

How Sexual Harassment Is Defined

sexual harassment definition illustrationWhat does sexual harassment at work entail? As of right now, the Equal Employment Opportunity Commission (EEOC) defines it as “unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature” that “explicitly or implicitly affects an individual’s employment, unreasonably interferes with an individual’s work performance, or creates an intimidating, hostile, or offensive work environment.”

New guidelines from the Equality and Human Rights Commission do include one crucial distinction. The key to whether a certain kind of behavior is viewed as sexual harassment lies in the accuser’s perception of the conduct. The differences arising from this definition are simply another challenge to be resolved.

Employee conduct guidelines and sexual harassment sensitivity training should help employees understand what types of behaviors have no place in the office. However, it is vital to create an environment in which your employees will feel safe to raise concerns regarding their treatment and won’t feel afraid to speak up if they feel that they have been harassed in any way.

Putting together a good plan on how to prevent sexual harassment should both educate your staff on what improper and proper workplace interactions look like and empower them to speak up if they believe that they are being sexually harassed by anyone at work, regardless of title and seniority level.

Sexual Harassment Prevention

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The good news is that recent efforts and measures for preventing sexual harassment have been yielding results. According to LinkedIn’s Global Talent Trends 2019 report, 75% of human resource professionals claim they have witnessed a shift in employee attitudes and behavior related to sexual harassment.

It can probably be said that the recent increase in the level of transparency and visibility for sexual harassment victims has helped to make workplaces safer, even though there is still much work to be done. According to EEOC’s recently released data, the number of sexual harassment claims slightly dropped in 2019 (7,514) compared to 2018 (7,609). Check out the most recent sexual harassment claims data from 2022.

One of the pillars of prevention is making sure that employers are consistently creating a safe environment where employees won’t fear being fired when speaking up about their issues, especially if the harassment is coming from their superiors. This constant reassurance is an essential factor in preventing sexual harassment. Potential abusers should be made aware that sexual harassment won’t be tolerated and that such behavior will be punished.

Teaching all employees about what sexual harassment entails, encouraging victims to speak up, and ensuring potential abusers that their behavior will not be ignored are all essential for sexual harassment prevention.

Now let’s take a look at some of the staples of putting together a sexual harassment prevention plan for your company.

Provide Your Employees With Training

Proper training is a key factor in combating sexual harassment in the workplace. Certain states, such as Connecticut, Maine, and California (for companies with 50 employees and more), will require employers to offer sexual harassment prevention training to their workers and management. However, most employers are strongly encouraged to provide at least yearly sexual harassment training sessions, even if it isn’t considered a state requirement.

These sessions should focus on explaining what sexual harassment entails, describing reporting procedures, and encourage everyone to talk to the HR staff openly about any concerns.

Training sessions for managers should be held separately from the employee sessions. The sessions should educate the management team by defining common sexual harassment examples and training them on how to respond to complaints and become proactive in preventing such behavior at the workplace.

Make Reporting Incidents Easier

A single way of reporting sexual harassment might not work for all of your employees. In an attempt to help them feel safe and encourage them to speak up, you should consider offering a variety of choices.

Victims may often feel embarrassed and might not want to talk to the HR staff in person. This is why you should include options such as reporting via email, by phone, or through a questionnaire.

Ensure Everyone Feels Protected

All employees should feel equally valued and protected, regardless of their gender, race, position within the company hierarchy, or sexual orientation.

It’s often not enough to simply claim your policy applies to all. Including different races, sexual identities, and genders in your guidelines and making them feel seen and represented is vital.

Be Transparent

It’s essential to be as transparent as possible for both legal and ethical reasons. If issues are solved behind closed doors and they never reach the light of day, victims may feel insecure about coming forward, because they’ve never seen your process in action and don’t know what to expect from it.

This is why publicly dealing with abusive behavior is vital in encouraging the victims to come forward and can act as a powerful deterrent to the abusers. While it’s important to respect the privacy of an employee that has been harassed, it’s equally important to be very public about the resolution of the issue.

The Cost of Sexual Harassment

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First and foremost, the real cost of sexual harassment in the workplace is much more than financial. If these types of incidents are occurring in your office and they are not being resolved properly, your business will inevitably suffer. When sexual harassment isn’t handled properly, employees are demoralized and the trust between themselves and their employers evaporates.

Demoralized employees who don’t feel comfortable, safe, and protected at work will be less productive and more likely to leave your company. But aside from these common effects that negative and unsupportive work environments have on the people who work there, sexual harassment claims at work also carry with them a potentially hefty financial burden as well.

According to EEOC’s data, the cost to recover from sexual harassment claims rose from $56.6 million in 2018 to $62.2 million in 2019. Keep in mind that in 2017, the price of recoveries amounted to $46.4 million, which obviously shows an upward trend that is expected to continue.

However, considering that the personal cost of being treated in an undignified manner and made to feel unsafe in a work environment is immeasurable, this increasing financial burden may lead to positive changes and prevention.

Insurance As Financial Relief

As we’ve established, sexual harassment claims are an expensive reality for many businesses. Having the right risk management policy in place will allow a company to mitigate the financial stress of such allegations and deal with them in the most ethical, forthright, and least stressful manner for all parties involved.

EPLI and D&O insurance illustration

Two policies would respond to potential sexual harassment claims; EPLI (employment practices liability insurance) and D&O (directors & officers insurance).

EPLI will protect the company from sexual harassment claims and other employment-related misconduct claims such as discrimination, wrongful termination, or failure to promote. The policy will cover the costs of defending your company against lawsuits and pay for settlements and judgments. A preferred EPLI policy will cover all full-time employees and temporary workers, part-time or seasonal workers, and independent contractors. Check out this video to learn more about EPLI policy coverage:

It’s important to note that most EPLI policies will have a bodily injury exclusion written into them. Should both verbal and physical harassment be alleged in the claim, EPLI may only cover the verbal part of the claim.

Sexual harassment claims can result in legal disputes against the abuser and against the company itself. If employees who allege sexual misconduct feel that their concerns have not been listened to and addressed satisfactorily, they may look to bring forward legal action against the company’s management team. In such cases, executives and board members may be held personally liable for their actions or lack thereof.

Having the right D&O policy in place will cover defense costs and damages (awards and settlements) in such cases. To avoid gaps in coverage, ideally, the D&O and EPL policies should be bundled into one seamless package of management liability insurance.

To get a better understanding of how to protect your company from sexual harassment claims and other employment issues, you can reach out to one of our expert brokers at any time to secure the right coverage at the best price.


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