Today’s U.S. citizens are more inclined to sue first and ask questions later. Unfortunately, as an employer, there is a good chance that eventually a lawsuit will be brought against your business. The number of lawsuits filed by their employees against their employers has been rising over the years. Most suits are filed against large corporations, but that still does not leave any company immune. Smaller companies need this just as bad as larger corporations. Continue reading to see how this policy can protect you and prevent a costly mistake.
What is Employment Practices Liability (EPLI)
Employment practices liability insurance, also known as EPLI, provides coverage to a business in case it is sued against claims made by employees. Some of the claims include:
- Wrongful Termination
- Wrongful Discipline
- Discrimination: Including all Acts, Laws, and different categories of people or things (race, age, sex)
- Sexual or Workplace Harassment
- Breach of Employment Contract
- Employment Related Misrepresentation
- Illegal Retaliatory Treatment
- Invasion of Privacy
- Negligent Evaluation
- Employment Related Wrongful Infliction of Emotional Distress
Some insurers provide this coverage as an endorsement or addition to their Business Owners Policy (BOP).
How EPLI Protects Your Business
EPLI coverage is another valuable tool in a complete risk-management arsenal. EPLI policies are written on a claims-made basis. This means that covered claims must be reported to the insurance company while the policy is in effect, or within an extended period described in the policy. The event leading to the claim must have occurred either on or after a specific date. Depending on the insurer, some offer extended retroactive dates or full protection for earlier claims.
The Cost of EPLI
The cost of EPLI coverage depends on your type and size business, the number of employees, and various risk factors like if your company has been sued over employment practices previously. The insurance company may also want to see your written personnel policies to help them determine the risk and cost of the policy. Generally, EPLI coverage can be purchased with limits ranging from $1-$25 million.
The policy will reimburse your company against the costs of defending a lawsuit in court, judgments, and settlements. If your company wins or loses in court, the policy covers the costs. Liabilities covered by other insurance policies, i.e. worker’s compensation, are excluded from the EPLI policies.
All companies, of any size, should look to their personnel policies as the first line of defense against both the number and severity of employment-related claims. With the rising number of lawsuits brought to employers, it is imperative to have this coverage. It will protect you, your money, stress and drama in your workplace as well. Make sure to contact one of our expert agents before a claim is brought against you. At TJ Woods, we strive to help our customers with the proper coverage and find a peace of mind during difficult times.
