Employment Practices Liability Insurance (EPLI)

What is Employment Practices Insurance?

Employment Practices Liability Insurance, or EPLI, protects your business against employment-related lawsuits made against it by employees or potential new hires. This covered is for claims related to the Equal Employment Opportunity Commission (EEOC), intended to protect workers against discrimination.

Why do you need Employment Practices Liability Insurance?

Large corporations tend to be better prepared to deal with these claims; they have legal departments, employee hiring policies, and procures, and the like. Smaller businesses tend to be without these things, making them more vulnerable to employment-related legal claims. EPLI can help protect your business from the costs arising from these claims.

If your business does any of the following, you may be vulnerable to employment-related legal action:

• Hires or fires employees
• Promotes or demotes employees
• Offers raises to employees
• Sends communications to/about employees
• Manages employee benefits

What does Employment Practices Liability Insurance cover?

EPLI covers claims which allege:

• Discrimination based on
  • Sex
  • Race
  • Age
  • Disability
  • Religion
  • National origin
  • Pregnancy
• Wrongful termination
• Wrongful discipline
• Wrongful failure to promote
• Workplace/sexual harassment
• Retaliatory action
• Breach of employment agreement or contract
• Workplace-related libel, slander, or, defamation
• Invasion of privacy
• Mismanagement of employee benefits
• Claims do not necessarily have to come from existing employees, as you are at risk as soon as you interview a potential new hire. If the prospective employee is not hired, they could allege it was due to wrongful termination.

These claims happen far too often to leave your business without the protection EPLI provides. Statistics on the frequency of such claims can be found on the site for US Equal Employment Opportunity Commission.

Employment Practices Liability Insurance can be extended to include coverage for third parties; for instance, a claim resulting from an interaction between a delivery person and the company receptionist.

What is not covered by Employment Practices Liability Insurance?

Employment Practices Liability Insurance protects against claims made against your business by current and employees and potential new hires, but there are some areas that are not covered by EPLI. These include:

• Penalties
• Civil fines
• Criminal fines
• Unpaid wages
• Claims related to unemployment benefits
• Workers compensation claims

For more details on what your coverage will and won’t include, as well as recommendations on what insurance policies you should consider for your specific business, please contact one of our agents. We’ll be happy to provide guidance on the best insurance solution for your company.