Sales of liability insurance policies that cover legal claims for office bullying and sexual harassment cases have been surging as companies prepare for lawsuits filed by their workers.
Amid the advancement of the #MeToo movement, which encourages victims of sexual harassment to come forward, companies are starting to view such workplace cases as a risk for management.
Insurance policies such as these are called "employment practice liability."
The protection applies to cases in which employees sue the company -- or those at the executive or management levels -- over mismanagement in power or sexual abuse or unfair dismissals.
Companies pay premiums for policies that will cover expenses such as legal fees, loss of salary and financial compensation.
In a legal case in which a transportation company paid financial compensation to a former employee who claimed to have left the company for repeated verbal abuse at the workplace, the company received 2 million yen in insurance benefits.
In another case, an eatery was reimbursed about 900,000 yen after it paid compensation to a female employee who claimed a male manager continuously made physical contact with her over a lengthy period.
Approximately 46,000 cases of such liability insurance policies were sold over a year through the end of July by four major insurances companies -- Tokio Marine & Nichido Fire Insurance Co., Sompo Japan Nipponkoa Insurance Inc., Mitsui Sumitomo Insurance Co. and Aioi Nissay Dowa Insurance Co.
The figure jumped by about 60 percent compared to the same period of the previous year, which involved about 29,000 cases.
The policies are in high demand, particularly among small-to-midsize companies.
The number of civil suits involving work-related issues has been increasing. Loss of salary in harassment cases and unpaid overtime are the main demands plaintiffs have made.
The preliminary figures for such cases in 2017 stood at 3,526, up more than 50 percent from 10 years ago.
Insurance for employees
Some insurance companies offer policies that cover attorney fees for employees suing their employers over work-related issues.
Among the major companies, Sompo Japan Nipponkoa Insurance offers such a services to policyholders who are under a group contract program that covers medical insurance, among other areas.
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