Employment Practices Liability Insurance (EPLI)
Every business that has at least one employee has an employment practice liability risk. Claims can be brought for many reasons and are typically the result of claims of wrongful termination, discrimination, sexual harassment and retaliation. In many cases, the claims are based on "he said – she said” information, but must be defended nonetheless. Even though most claims are filed against large corporations, every employer is at risk.
The typical EPLI policy provides coverage against employee lawsuits including claims of :
- Sexual harassment
- Discrimination
- Wrongful termination
- Negligent evaluation
- Failure to employ or promote
- Breach of contract
- Wrongful discipline
- Deprivation of opportunity
- Infliction of emotional distress
- Mismanagement of benefit plans
Typically, policies are rated based on your industry, the number of employees and claims history. The insurance policy is designed to reimburse for defense costs, settlement costs, and court judgments although they will not pay for punitive damages or civil or criminal fines.
Most insurance carriers that offer EPLI will provide resources to the business in order to mitigate claims. If implemented properly, these mitigation resources will assist the business with reducing claims, and can result in discounted premiums by :
- Creating effective screening and hiring programs
- Posting corporate policies in conspicuous areas throughout the workplace and placing them in employee handbooks
- Offering a systematic process to file a grievance if the employee believes they have been subjected to sexual harassment or discrimination
- Documenting everything that occurs and the process your company is taking to solve, and prevent employee disputes
Many business owners make the mistake of purchasing EPLI after an action has been filed, and then discover that the coverage will not be available while the action is pending. When they are able to purchase coverage after an action has been resolved, they will more than likely be surcharged for the previous action whether they were forced to settle or not. Knowing this, it is incumbent on every business owner to make this coverage a part of their insurance portfolio.
Most business owner policies offer an endorsement for EPLI. However, as an endorsement, the coverage may not be as broad as in a stand-alone policy.
Contact us so that our experienced agents can assist you with identifying your EPLI needs, and prepare a package that will sufficiently cover your business.