Employment Practices Liability
What is Employment Practices Liability Insurance (EPLI)?
EPLI covers a business against claims by workers or job applicants where their legal rights have been violated.
The number of lawsuits in this area of law has been increasing. While most suits are filed against large corporations, no company is immune to such lawsuits. Recognizing that smaller companies now need this kind of protection, some insurers provide this coverage as an elective endorsement to their commercial policies. Other companies offer EPLI as a stand-alone coverage.
EPLI provides protection against many kinds of employee lawsuits including claims of
* Sexual Harassment
* Discrimination
* Wrongful Termination
* Breach of Employment Contract
* Negligent Evaluation
* Failure to Employ or Promote
* Wrongful Discipline
* Deprivation of Career Opportunity
* Wrongful Infliction of Emotional Distress
* Mismanagement of Employee Benefit Plans
The cost of EPLI coverage depends on your type of business, the number of employees and various risk factors such as whether your company has had previous employment practices claims in the past. The policies will reimburse your company against the costs of defending a lawsuit in court and for judgments and settlements. The policy covers a percentage of the legal costs, whether your company wins or loses the suit. Policies typically do not pay for punitive damages or civil or criminal fines.
To prevent employee 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.
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