Employment Practice Liability Insurance

Employment Practice Liability Insurance, also called EPLI, is a form of liability insurance that covers wrongful acts arising from the employment process. Commonly, claims made are wrongful termination, discrimination, sexual harassment, and retaliation. Moreover, EPLI defends businesses against claims made by workers that their legal rights as employees of the firm have been violated, causing them to charge the firm for its actions. In the US, thousands of claims are made by employers to the employees. From the year 2015-2018, their are 341,560 charges to the Equal Employment Opportunity Commission (EEOC) because of workplace discrimination. This only shows that the employer is more likely to have an employment claim than a property or general liability claims.

Employment Practice Liability Insurance

Understanding more about EPLI- How it can affect a business?

Over hundreds of claims are made because of workplace discrimination, and it can be a problem for a business. In which it does not cover by Employment Practice Liability Insurance. Moreover, large businesses are always prepared to deal with any claims made by their employees because they have significant EPL. On the other hand, small businesses and new businesses are the ones that are vulnerable to such an employment-related claim. That is because they lack Human Resources that should guide the workers in a proper procedure for hiring, disciplining, terminating and a proper guide for business terms and conditions. As a result, claims made by employees consume a lot of time and expensive to defend, leading the business in the worst condition.

Types of Employment-related claims:

  • Wrongful Termination
  • Sexual and other Harassment –related acts
  • Retaliation
  • Defamation
  • Invasion of Privacy
  • Failure to promote
  • Deprivation of a Career Opportunity
  • Negligent Evaluation
  • Libel, Slander, or Humiliation
  • Violation of an Employee’s civil rights
  • Infliction of emotional distress
Employment Practice Liability Insurance

Employment Practice Liability Insurance Cost and Cause

The cost of EPLI depends on the nature of your business, the number of employees, and various risk factors. Such as your employees sues your business over employment practices in the past. The policies will reimburse your company against the costs of defending a claim in court and for 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. Moreover, Liabilities covered by other insurance policies such as workers’ compensation excludes EPLI policies.The concern for any business is no longer whether it will face a complaint of EPL claim, but when it does, how much it will cost, and what harm it could do to make a bad image to your business.