EPLI, aka Employment Practices Liability insurance by definition is coverage designed to protect you from law suits filed (justly or unjustly) by anyone in your employ now, formerly employed by you and even people whom you considered employing. And that makes EPLI a very important piece of basic business equipment.
Your Employment Practices Liability Insurance policy can help protect you from a smorgasbord of potential law suits, if you take care to get the broadest coverage available.
Here is a short-list, by no means inclusive, of some things to look for in your Employment Practices Liability Insurance coverage:
Get an EPLI policy with a broad definition of who is insured. This should include the company as an entity, along with the officers, directors and every type of employee (full-time, part-time, temp, leased, loaned and seasonal). The importance of this will become readily apparent if you’re ever sued for a sexist slur made by temporary receptionist to a job applicant, for example.
Your Employment Practices Liability Insurance policy should also have a broad definition of what constitutes a claim. You want to be covered for every eventuality including monetary damages, every conceivable kind of legal proceeding from criminal to regulatory, settlements, judgments, lost pay, your defense fees and punitive damages.
Wrongful Employment Practices is another area of your EPLI that needs to be broadly defined because if it isn’t you won’t believe the things you could end up paying for beyond the obvious sexual harassment and race discrimination. Read the fine print to be sure your Employment Practices Liability Insurance coverage includes every violation of federal, state, local and common law about employment discrimination, deprivation of career opportunities, defamation, retaliation, negligent job evaluation and failing to have an acceptable employment policy document – in short any wrongful act you or someone in your employ could potentially perpetrate on another person in your employ.
Watch out for exclusions, too. For instance, make sure your Employment Practices Liability Insurance policy does not exclude any of the aforementioned wrongful practices that may have taken place before you got the policy. That way, you don’t have to worry about being sued by that disgruntled vice president of marketing you fired three years ago for pilfering paperclips.
These are just a few of the things to look for in effective Employment Practices Insurance coverage. To be on the safe side, you might want to check with your business attorney before you sign any policy.