By acquiring an employment practices liability insurance policy, businesses are covered against employee claims of their legal rights being violated. These employee claims and lawsuits can stem from a wrongful termination, sexual harassment, breach of contract, discrimination, mismanagement of employee benefits and more.
Employment Practices Liability Insurance Coverage
Businesses of all sizes and within all industries should have an EPLI policy to cover legal costs, punitive damages or criminal fines in the event of a lawsuit. Here is a close look at the type of coverage that an EPLI policy provides.
Costs Associated With Lawsuits
If an employee feels as if their employer had violated their legal rights, they can sue their company.
In the event of a lawsuit filed by an employee, an EPLI policy will cover the associated legal costs, including attorney fees. If the injury or illness the worker sustained is severe, these costs can be substantially high.
As businesses become more diverse, the probability of a worker submitting an employee discrimination claim increases. An EPLI policy covers employers against employees who allege they were victims of discrimination. Examples of common discrimination claims include:
- Gender discrimination
- Racial discrimination
- Age-based discrimination
- Disability discrimination
- Sexual harassment
- Wrongful termination
In certain cases, an EPLI policy can also cover claims of wrongful discipline, breach of employment contract, failure to promote, or deprivation of career opportunity.
Cost Of An EPLI Policy
The cost of employment practices liability insurance typically depends on several factors, including:
- The company’s size (including turnover rates)
- The type of business
- The company’s history of employment practices-related lawsuits
- Policy limits and deductibles
In order to prevent discrimination and other types of employee lawsuits, it’s important to ensure that your workers and managers are both thoroughly educated about proper employment practices. You can do this by:
- Introduce detailed screening and hiring programs
- Ensure that each employee has a handbook on company policies
- Record everything that occurs and the steps your business takes to avert and resolve employee disputes
- Clearly explain to all employees what they should do if they experience harassment or discrimination from a superior (e.g. document their communications with said supervisor, file a complaint with human resources)
What Does EPLI Not Cover
An EPLI policy does not normally cover any of the following types of claims:
- Bodily injury claims
- Property damage claims
- Penalties and fines (civil or criminal)
- Actions that occur outside of the United States
- Claims related to the Employee Retirement Income Security Act (ERISA), the National Labor Relations Act (NLRA), or the Consolidated Omnibus Reconciliation Act (COBRA).
Speak To The Northern VA Insurance Brokers Today
Reach out to the agents at CI Solutions to learn more about employment practices liability insurance or our other commercial insurance products. We are an independent agency that is dedicated to providing clients with comprehensive and affordable insurance policies that can be customized to meet their unique needs. Call CI Solutions today at 703.988.3665 or contact us online for more information about our EPLI policies.