It’s easy to feel as if employing people is a legal minefield. This is mainly because there is so much potential for lawsuits over wrongful termination, harassment, discrimination and workplace conditions. Employment practice liability insurance (or EPLI) is a coverage designed to protect the insured against the risks associated with running a business. EPLI policies cover a range of risks such as wrongful termination, sexual harassment, contract violations, and wage and hour law violations. In a world where courts tend to favor the employee, whether they are right or wrong, an EPL policy can be the difference between keeping a business open or not.
EPLI policies often cover the business itself, as well as individuals like company directors.
Employment practice liability insurance policies are usually written to cover cases that come out of unintentional actions (or failures to act) rather than deliberate acts of discrimination or other wrongful practice. Employee discharge is a big risk for an employer. While an employer has the right to hire and fire at will, an employee can threaten to sue for wrongful termination. Even if the employer is innocent, the legal fees to prove it can add up quickly so the easiest way is to simply settle the suite.
The average total cost associated with EPL-related events is over $70,000
Over 99,000 charges were filed with the U.S. Equal Opportunity Commission in 2012
The number one area for litigation in the past three years has been labor and employment matters
Your company doesn’t have to do anything wrong to be sued, but will still have to pay for defense
Many non-buyers mistakenly believe that their General Liability policy will cover EPL-related events, but they will need the complete Employment Practices Liability coverage for full protection.
One question to ask an insurer is whether the costs of defending a claim in court count towards the payout limit for any damages. Also, look out for mention of a “claims made” basis–that’s insurance jargon that means you are only covered if the policy is active both when the alleged incident took place and when the employee makes the claim.
Our EPLI experts can walk you through the various policies available to help determine if this type of insurance is a good fit for your business. Coverage may include:
- Insurance for wrongful termination, sexual harassment, discrimination, invasion of privacy, false imprisonment, breach of contract, emotional distress, and wave and hour law violations.
- FLSA available on most risks
- Defense Outside the Limit may be available up to 200 employees if $500,000 limit or higher chosen (doesn’t apply to FLSA violations)
- Full Prior Acts coverage for claim-free accounts in most states and for most classes
Let’s discuss your employment practice liability insurance.
One of our insurance advisors will reach out to you to review your information and present you with the appropriate EPLI solution. There’s no obligation, just good-old-fashioned advice.
Carnahan Insurance Agency offers comprehensive employment practice liability insurance in San Antonio and throughout the state of Texas.
We are a proud member of the Insurance One family.