Employment Practices Liability Insurance
Get free employment practices liability insurance (EPLI) quotes for your business.
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Employment Practices Liability Insurance Quotes (EPLI)
Get Free Employment Practices Liability Insurance Quotes to Protect against Disputes
With the rapid rise of employment-related lawsuits, the demand for Employment Practices Liability Insurance (EPLI) has grown dramatically in recent years. It protects businesses from claims by workers who feel that their legal rights as employees were violated.
Almost all EPLI policies cover the three largest areas: discrimination, sexual harassment, and wrongful employment (both hiring and firing). Some policies also provide coverage for wrongful discipline; breach of contracts (both expressed and implied); negligent supervision, evaluation, or promotion; emotional distress; invasion of privacy; drug testing; mental anguish; slander; libel; and mismanagement of employee benefit plans.
Most policies cover legal costs in addition to claim settlements (up to specified limits). Coverage typically applies even in the event of groundless or fraudulent claims.
What Employment Practices Insurance Is Not
EPLI isn’t usually part of more comprehensive Commercial General Liability policies. In fact, most General liability policies specifically exclude employment-related claims. It also differs from professional liability policies in that EPLI protects against legal actions from employees, not clients.
Some Business Owners’ Policies and Directors’ & Officers’ Insurance policies (typically for smaller for-profit companies) may provide limited employment practices coverage, but the provisions tend not to cover as much as specific EPLI policies. Liabilities covered by Workers’ Compensation Insurance are usually excluded from EPLI policies.
Willful and intentional acts and criminal misconduct are usually excluded from EPLI policies, and most EPLI policies don’t cover punitive damages or civil punitive penalties.
Who Needs Employment Liability Insurance Quotes?
Over half of all lawsuits filed in Federal court alleging civil violations are filed by employees against their employers. Such claims were much less common ten years ago. Some governmental legislative acts (like the Americans with Disabilities Act and the Family Medical Leave Act) have heightened awareness of wrongful employment practices and have contributed to the increasing number of claims.
Large firms may be most at risk, but no employer is immune from employee lawsuits. Small business owners may feel safe if they know and trust their employees, but need to be reminded that claims could be filed by former, current, or even prospective employees.
Things To Think About
The cost of EPLI coverage is based on number of employees, location, type of business, industry, employment practices, past loss experience, and other operating characteristics. Companies can minimize their risk with consistent emphasis on fair and equitable hiring, discipline, review, and termination policies; careful screening of prospective employees; meticulous documentation of incidents; comprehensive employee training on these matters; and clear communication of corporate policies in employee handbooks, newsletters, bulletin board postings, websites, etc.
Compare policies to find the broadest coverage available for the price. Find out if the policy covers applicants, part-time and seasonal workers, leased workers, and independent contractors. How about board members? Volunteers? Are there exclusions for downsizing or other events which may lead to employee discontent?
Also find out if there are exclusions for certain Federal employment acts like the Fair Labor Standard Act and the Occupational Safety and Health Act.
Prompt reporting of all claims to your insurance company is absolutely critical. Failure to comply could seriously jeopardize your coverage.
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Frequently Asked Questions (FAQs)
Get clear answers to common insurance questions and important details to guide your coverage decisions.
What is Employment Practices Liability Insurance (EPLI)?
EPLI provides coverage for businesses against claims made by employees regarding wrongful acts like discrimination, harassment, wrongful termination, and other employment-related issues. This insurance helps cover legal defense costs, settlements, and judgments associated with these claims.
Why do I need EPLI?
EPLI is essential for businesses as it protects against lawsuits arising from employee-related disputes. Even businesses that follow best practices can be vulnerable to claims, making this coverage crucial to mitigate financial exposure from legal costs and settlements.
What does EPLI cover?
EPLI covers claims made by current, former, or prospective employees for wrongful employment practices, including discrimination, harassment, wrongful termination, and retaliation. It can also cover claims such as failure to promote, wrongful discipline, and negligent evaluation.
What is not covered by EPLI?
EPLI typically does not cover bodily injury, property damage, wage and hour law violations, or criminal fines and penalties. Some policies may exclude coverage for prior acts that occurred before the policy’s start date, depending on the specific terms.
How much does EPLI cost?
The cost of EPLI varies depending on factors like company size, location, and claims history. Small businesses may pay an average premium of around $2,665 annually, but rates can differ significantly based on the risk profile of the business.
How can I reduce the cost of EPLI?
Businesses can reduce EPLI costs by implementing strong HR practices, maintaining clear employee policies, conducting regular employee training on harassment and discrimination, and keeping accurate records of all employment decisions.
How can I prevent EPLI claims?
To minimize the risk of EPLI claims, businesses should develop comprehensive employee handbooks, conduct regular performance reviews, and have clear policies against discrimination and harassment. Providing training and maintaining an open-door policy for reporting issues can also help prevent claims.
