What Is Employment Practices Liability Insurance (EPLI)?
EPLI is a type of liability coverage to protect employers from costly claims made by employees how are suggesting their legal rights have been violated. This protection is a vital operating expense to be considered as a single claim accusation could cost tens of tens of thousands of dollars to address.
This issue is not going away anytime soon in fact lawsuits filed by employees have been steadily rising and posses a risk for every employer both small and large.
What Does ELPI Cover?
EPLI is designed to protect companies from many kinds of employee lawsuits, including claims such as:
- Wrongful termination
- Failure to employ or promote
- Sexual harassment
- Breach of employment contract
- Negligent evaluation
- Wrongful discipline
- Deprivation of career opportunity
- Wrongful infliction of emotional distress
- Mismanagement of employee benefit plans
- Violation of the Family and Medical Leave Act
- Wrongful failure to promote
Why You Need Employment Practices Liability Insurance
Unfortunately, if you are a small business you have more than a 30% chance that you will be involved in a lawsuit from an employee claim from one of the situations in the list above.
If you think you are already covered by your current business liability policy you may want to take a moment and double-check. Most liability policies do not cover employment suits. This means that you have a major business liability exposed.
If you would like to protect yourself and make sure that any potential legal costs associated with employee lawsuits are covered whether your company wins or loses the suit you will want to buy a policy.
Lawsuit’s & Cost’s Examples
“A male worker in a building materials supply company claimed sexually
harassment after rejecting the advances of female supervisor.
Plaintiff Verdict: $50,112 “
“Restaurant server, fired immediately after reporting her pregnancy, sued for pregnancy discrimination.
Plaintiff Settlement: $30,000 “
“Graphics company sued for retaliatory discharge of employee who testified on behalf of a co-worker.
Plaintiff Verdict: $255,000″
These real-life claims are why you will want to layer on EPLI insurance above and beyond your business insurance policy. These policies provide the financial protection needed to give you peace of mind to focus on your business.
How To Avoid These Lawsuits?
Even if you have all your insurances in place ideally limiting any lawsuit would be ideal. Preventative action is the best way to prevent lawsuits from your employees.
We at Harassment Alert know that education is a key factor in preventing issues in the workplace. This is why we provide turnkey educational resources and compliance management for your business.
From our experience, we find that large corporations typically have more suitable employment practices. In addition, they also have the appropriate insurance coverages to protect themselves. We find that smaller and new companies are most vulnerable to lawsuits from employees. The reason we find is these companies lack legal guidance or appropriate employee guidelines to protect themselves.