Who Needs Employment Practices Liability Insurance

Who Needs Employment Practices Liability

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Who Needs Employment Practices Liability Insurance? Employment Practices Liability (EPL) is a type of insurance that protects employers from lawsuits brought by employees. This type of coverage is important for any business, regardless of size or industry. Because even the most careful employers can find themselves facing a lawsuit from an unhappy employee. But who needs this insurance? When do you need to purchase it? What kind of protection does it provide? In this blog post, we will explore the answers to these questions and more in order to help you make the best decision when it comes to Employment Practices Liability insurance.

Who Should Buy Employment Practices Liability

If you are an employer, you should buy employment practices liability insurance. This type of insurance protects you from lawsuits alleging wrongful termination, discrimination, sexual harassment, and other employment-related claims.

When You Should Get Employment Practices Liability

If you are an employer, you should consider getting Employment Practices Liability (EPL) insurance. This type of insurance can protect you from lawsuits filed by employees who allege that their rights have been violated.

There are a number of different situations when EPL insurance can be beneficial. For example, if you are accused of discrimination or sexual harassment, EPL insurance can help cover the cost of your legal defense. Even if the allegations against you are false, defending yourself in court can be expensive.

Another situation when EPL insurance can be helpful is if an employee sues you for wrongful termination. If the employee alleges that they were fired without cause, or in retaliation for complaining about workplace conditions, EPL insurance can help cover the cost of your legal defense.

Even if you are not currently facing any employment-related lawsuits, it is still a good idea to have EPL insurance in place. This type of insurance can provide peace of mind in knowing that you are protected in the event that an employee does file a lawsuit against you.

What Does Employment Practices Liability Cover

Employment practices liability (EPL) insurance is a type of insurance that businesses can purchase to financially protect themselves against lawsuits alleging wrongful employment practices. These lawsuits can allege a variety of wrongs, including discrimination, sexual harassment, and retaliation.

EPL insurance can provide protection for a business’s legal expenses in defending against these kinds of lawsuits, as well as any damages that may be awarded if the business is found liable. This coverage is important for businesses of all sizes, as even small businesses can be sued for employment-related issues.

Who Needs Employment Practices Liability and What Can Happen if you don’t have it?

If you don’t have employment practices liability insurance, you could be held liable for damages if an employee sues you for wrongful termination, sexual harassment, or other workplace discrimination. Even if the lawsuit is groundless, you’ll still have to pay for your own legal defense. If you’re found liable, you’ll have to pay any damages awarded by the court, which could include lost wages, emotional distress, and attorney’s fees.

The Median Employment Practices Liability Award in 2005 Was Over $250,000,

(50th percentile) and well as the award range at -25% (25th percentile) of the median and +25% (75th percentile) i.e. in 2005 the award in the 25th percentile was $60, 321, the median (50th percentile) was $250,632 and the award in the 75th percentile was $600,000 so there was a 75% chance of the award exceeding $60,320 exclusive of legal fees. Also, this indicates that there was a 25% chance that the judgment would exceed $500,000.

How are Employment Practices Liability Insurance Policies Rated

Employment Practices Liability Insurance (EPLI) policies are typically rated using a combination of business size and industry type. Business size is usually determined by the number of employees, with small businesses having fewer than 100 employees and larger businesses having more than 100 employees. Industry type is usually classified as either high-risk or low-risk. High-risk industries include those that are typically associated with discrimination lawsuits, such as healthcare, education, and hospitality. Low-risk industries include those that are not typically associated with discrimination lawsuits, such as manufacturing, retail, and technology.

EPLI rates can also be affected by the claims history of the business. A business with a history of discrimination claims is likely to pay higher EPLI rates than a business without such a history. Additionally, businesses that have implemented effective equal employment opportunity practices may be eligible for discounts on their EPLI premiums.

Employment Practices Liability Cases can Bankrupt a Company

An article in the Small Business Review¹comments on how: The “sue-your-terminator” trend is no longer relegated to Fortune 500 corporations, and has trickled down to smaller businesses. “No company is immune, no matter what the size…” It goes on to say that “”in 2006 alone, 75,768 employment discrimination charges were filed with the Equal Employment Opportunity Commission… another 30,000 small businesses are sued in federal court each year for wrongful termination and other matters””, according to a study conducted for the Small Business Administration. Additionally “However erroneous the charges may be, litigation can easily drive any small business into bankruptcy.” For a small business owner the horror of being dragged into an EPLI suit with our Employment Practices Liability Insurance can not only be financially destructive but also stressful and mentally debilitating.

Rising Employment Practices Liability Insurance Costs

Brett Lipton, President of Castle Rock Insurance Agency , a New York Based Property and Casualty Insurance Agency, Inc. states, “”The demand for EPLI is on the rise. More business are acknowledging the importance of having a business insurance coverage that will provide Employment Practices Liability Insurance against claims and suits arising from issues of age, race and gender discrimination as well as wrongful terminations, sexual harassment, and even sexual misconduct. We insure several restaurants and nightclubs where liquor is served, staff is young, turnover is high, and in some cases the young women that work there are minimally dressed.

This is a catastrophic equation for an EPLI suit. In fact Nightclub manager, Jacqueline A. of New York, specifically called inquiring about EPLI by referred to it as “Pinching and Grabbing Insurance“. For other firms, the concern tends to be layoffs that invoke older, more tenured, higher paid employees that sue for age discrimination.”” When you consider the average cost of an EPLI, or Employment Practices Liability Insurance policy is about the cost of a few hour legal consultation with a reputable law firm, and the insurance coverage includes defense, it does not pay to forego having the Employment Practices Insurance coverage.”