Employment Practices Liability Coverage (EPLI)

Employment Practice Liability Insurance

Employment Practice Liability Insurance (EPLI) covers businesses against claims filed by workers. This insurance comes into play when a worker claims a company violated their rights as an employee.

Lawsuits filed against employers by employees has been rising. Most suits are filed against large corporations, but smaller companies are also at risk. Some insurers offer EPLI as part of their standard business owners insurance policy. Other companies offer EPLI as stand-alone coverage.

EPLI covers most situations associated with claims made by employees. Such claims can include sexual harassment, breach of employment contract, discrimination, wrongful termination, negligent evaluation, and failure to employ or promote. Wrongful discipline, deprivation of career opportunity, causing emotional distress, and mismanagement of benefit plans is covered as well.

The type of business, the number of employees, and risk factors determine the cost of EPLI. The cost is generally worth it, considering the high costs associated with defending against a lawsuit in court and for judgments and settlements.

The policy covers legal costs, whether your company wins or loses in court. But EPLI doesn’t cover punitive damages or civil or criminal fines. And liabilities covered by other insurance policies are excluded from EPLI coverage.

The best way to avoid a lawsuit with an employee is to educate managers and employees. Make them aware of what is or isn’t proper business behavior.

Accomplish this by creating effective hiring and screening programs to avoid hiring discrimination. Make sure policies are clear to everyone by posting corporate policies throughout the workplace and in employee handbooks.

Educate employees about what steps to take if they face sexual harassment or discrimination in the workplace. And make sure all employees know which behaviors the company will and will not tolerate. Document what the company is doing to prevent and solve employee disputes.

EPLI is worth considering, no matter the size of the business. A large corporation, small firm, or newly formed business is always at risk of an employee making a claim.