EPLI, or Employment Practices Liability Insurance covers businesses and business owners against claims by workers, employees or ex-employees that their legal rights as employees have been violated.
EPLI Insurance Employment Practices Liability Insurance if the proper coverage if you are concerned about lawsuits filed by employees or ex-employees against their employers. Recently, with the increase of layoffs due to
a weak economy or faltering business incomes more and more companies are being forced to lay off their staff resulting in Employment Practices Liability Claims. Although many suits are filed against large corporations, no company is immune to such lawsuits.
Without EPLI Employment Practices Liability Insurance, your company may be left alone, without support to defend claims.
Now that smaller companies are coming under fire for similar economic downtrends, they too, are targets for Employment Practices and need this kind of protection, some insurers provide this coverage as an endorsement to their Business Owner’s Policy (BOP), but this is becoming more rare due to the increase in EPLI Claims. Most Insurance Companies offer EPLI as a stand-alone coverage.
EPLI can provide insured’s protection against many kinds of employee lawsuits, including claims of:
- Sexual Harassment Suits Against you.
- Sexual Abuse & Molestation against your company.
- Being sued for Discrimination.
- Wrongful Termination (Even if it is a layoff)
- Breach of your Employment Contracts
- Your Negligent Evaluation Practices
- Failure to Employ or Promote (EOE)
- Wrongful Disciplinary Actions
- Your Deprivation of Potential Career Opportunities
- You wrongfully Inflicting Emotional Distress or Stress on Employees
- Mismanagement of Employee Benefit Plans (See ERISA)
- You can also extend your coverage to include 3rd party claims
The average cost of EPLI coverage depends on:
- What type of business you operate.
- The number of employees you have.
- Whether your company has been sued over employment practices in the past.
- How long you have been in business.
- The geographical location of your business.
Your Employment Practices Liability Insurance policy will reimburse your company against:
- The costs of defending your lawsuit in court.
- The costs of judgments and settlements against you.
- The policy covers legal costs, whether your company wins or loses the suit.
Policies also typically do not pay for punitive damages or civil or criminal fines. Liabilities covered by other insurance policies such as Workers Compensation, General Liability, Personal Injury are excluded from EPLI policies.
How You can Prevent Employee Practice Liability Lawsuits
- Educate your managers and employees so that you minimize problems in the first place
- You should create effective hiring and screening programs to avoid discrimination in hiring.
- Your firm should post corporate policies throughout the workplace. And, you should also place them in employee handbooks your so policies are clear to everyone.
- Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Make sure supervisors know where the company stands on what behaviors are not permissible.
- Document everything that occurs and the steps your company is taking to prevent and solve employee disputes.
Do not take lightly the importance of your EPLI – Employment Practices Liability Insurance. Too many businesses and companies do not consider it until there is a loss which may be catastrophic for any business.
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