Employment Practices Liability Insurance - EPLI

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Lawsuits filed by employees or ex-employees against their employers has been rising. Recently, with the increase of layoffs due to a weak economy or faltering business incomes more and more companies are being forced to lay off their staff resulting in Employment Practices Liability Claims. Although many suits are filed against large corporations, no company is immune to such lawsuits.

Without EPLI your company may be left alone, without support to defend claims. Now that smaller companies are coming under fire for similar economic downtrends, they too, are targets for Employment Practices and need this kind of protection, some insurers provide this coverage as an endorsement to their Business Owners Policy (BOP), but this is becoming rare due to the increase in EPLI Claims and/or coverage limits are not adequate.

EPLI provides insured protection against many kinds of employee lawsuits, including claims of:

• Sexual Harassment Suits
• Sexual Abuse & Molestations
• Discrimination Law Suits
• Wrongful Termination (Even if it is a layoff)
• Breach of Employment Contract
• Negligent Evaluation Practices
• Failure to Employ or Promote (EOE)
• Wrongful Disciplinary Actions
• Deprivation of Potential Career Opportunities
• Wrongful Infliction of Emotional Distress or Stress
• Mismanagement of Employee Benefit Plans (See ERISA)

The average cost of EPLI coverage depends on:

• Your type of business
• Number of employees you have
• Whether your company has been sued over employment practices in the past
• How long you have been in business
• The geographical location of your business

EPLI policies will reimburse your company against:

• The costs of defending a lawsuit in court
• The costs of judgments and settlements
• The policy covers legal costs, whether your company wins or loses the suit

Policies also typically do not pay for punitive damages or civil or criminal fines. Liabilities covered by other insurance policies such as Workers Compensation, General Liability, Personal Injury are excluded from EPLI policies.

To Prevent Employee Practice Liability Lawsuits

• Educate your managers and employees so that you minimize problems in the first place.
• Create effective hiring and screening programs to avoid discrimination in hiring.
• Post corporate policies throughout the workplace and place them in employee handbooks so policies are clear to everyone.
• Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Make sure supervisors know where the company stands on what behaviors are not permissible.
• Document everything that occurs and the steps your company is taking to prevent and solve employee disputes.

Do not take lightly the importance of your EPLI - Employment Practices Liability Insurance. Too many businesses and companies do not consider it until there is a loss which may be catastrophic for any business.