Employment Practices Liability Coverage (EPLI)

Protecting Your Business

Employee Practices Liability Coverage

20 percent of businesses with fewer than 500 employees will have their employment practices challenged by an employee or ex-employee. These challenges cost an average of $125,000 to defend. Most big corporations can easily handle these litigation costs, but small and medium-sized businesses cannot. For these times, Employment Practices Liability Insurance can help.

Employment practices liability insurance (EPLI) is insurance that covers wrongful acts that happened during the employment process. EPLI can cover a business from the pre-hire stage through the exit interview and can help pay for legal costs and attorneys’ fees. Without EPLI, these fees could wipe out everything for which you have worked. EPLI can also cover temporary or seasonal employees, which is good for a Christmas rush or a fruit harvesting business.

Claims covered under these policies include wrongful termination, sexual harassment, and discrimination. EPLI also covers defamation, invasion of privacy, negligent evaluation, and failure to promote. Exclusions include property damage, dishonest Acts, and bodily injury and are on a �claim made basis�. EPLI is available by itself, but insurance companies usually sell it as a portion of a bigger management liability package.

EPLI can cover Employee privacy concerns and electronic storage of data. Laws governing the employer�s liability to employees vary between states and can determine how much coverage you need. For example, we consider California a pro-employee as far as employers� liability is concerned. Other states fall somewhere else in the range between pro-employer and pro-employee with their laws and thinking regarding employee liability in the workplace.

Usually, EPLI coverage begins when a group of employees or a single employee claims a company has violated their civil rights. The claim will say the employee or group of employees could not finish their work in a fair environment. You can decrease the odds of an employment-related lawsuit by having good human resource policies and practices in writing. However, for the times’ good policies and practices are not enough, and EPLI policy could help protect your business from employee claims.