Loss Insight: ADA violations trending up as act turns 25

Twenty-five years ago on July 26, President George H.W. Bush signed the American with Disabilities Act into law, making it illegal for employers to discriminate against qualified job applicants and employees based on physical or mental disabilities.

Other than its focus on employment discrimination, the law furthermore requires employers to provide “reasonable accommodations” to applicants and employees with disabilities unless providing these measures would cause undue hardship.

The definition of “disability” is often broadened, putting pressure on employers. For instance, the Americans with Disabilities Act Amendments Act (ADAAA), which went into effect on Jan. 1, 2009, directed the US Equal Employment Opportunity Commission (EEOC) to revise its regulations “to restore the intent and protections” of the original act, and to address what lawmakers felt was a too-narrow view taken by courts of the original ADA provisions.

For protection against claims, insurers provide employment practices liability insurance. According to Advisen’s Loss Insight database, ADA violation are trending up over time. At last count, the database had recorded 82 cases of ADA violations in 2015.

Loss Insight, a large-loss database, can be helpful in establishing probabilities. The data below gives an indication of the loss expected from an ADA violation. Fifty percent of cases in Loss Insight result in losses of $75,000. A loss of about $1.5 million is seen in 5 percent of the cases in the database.

No industry is untouched by the ADA. While the Services industry accounts for most of the cases in Loss Insight, violations from Public Administration, Wholesale & Retail and Transportation & Public Utility industries see plenty of ADA cases.