EPLI covers businesses against claims by workers that their legal rights as employees of the company have been
violated. You're at risk of an employment claim from the moment you interview a prospective employee. For example, if
you choose not to hire the interviewee, that individual could allege some sort of discrimination or if you hire that
person and later fire them due to poor attendance, that discharged employee could claim wrongful termination.
EPLI provides protection against many kinds of employee lawsuits, including claims of:
The cost of insuring your business for EPLI coverage depends on a variety of factors, such as the number of people you
employ, if you've had prior suits lodged against the company, the percentage of employee turnover, and if you have
established rules and practices in place. Depending on the size of the company, EPLI can be offered as an endorsement
to a Business Owner's Policy (BOP), a General Liability Policy (GL), or a specific stand alone policy can be written
in conjunction with a BOP policy.
- Sexual harassment
- 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
Understand employment law
A variety of laws are in place to protect the rights of people you hire or are considering hiring. While employment
practices liability insurance is a smart investment for many companies, it's important to understand and carefully follow these laws:
- Title VII of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race, color, religion,
national origin and sex. It also prohibits sex discrimination on the basis of pregnancy and sexual harassment.
- The Equal Pay Act of 1963, which prohibits employers from paying different wages to men and women who perform essentially the same work under similar working conditions.
- The Civil Rights Act of 1966, which prohibits discrimination based on race or ethnic origin.
- The Immigration Reform and Control Act of 1986, which prohibits discrimination on the basis of national origin or citizenship of persons who are authorized to work in the United States.
- The Americans with Disabilities Act of 1990, which prohibits discrimination against persons with disabilities.
- The Bankruptcy Code, which prohibits discrimination against anyone who has declared bankruptcy.
- Equal Employment Opportunity Act of 1972, which prohibits discrimination against minorities based on poor credit ratings.
- The Age Discrimination in Employment Act, which prohibits discrimination against individuals who are age 40 or older.
EPLI Compared To Other Insurance Policy Types
Insurers offer employers a variety of insurance options, so it is important to understand the differences between the types of coverage. Directors and Officers Insurance (D&O), Errors and Admissions Insurance
(E&O) and EPLI each protect employers, and/or the managers who work for them, in different ways. D&O insurance liability policies provide insurance for negligent acts, omissions or misleading statements committed by directors and officers of a company that result in lawsuits being filed against the
company. D&O coverage can be purchased to reimburse the company when it indemnifies directors or officers, to specifically cover directors or officers when the company doesn't indemnify them or provide entity coverage for claims made specifically against the company. E & O insurance coverage protects those
people that give advice, make educated recommendations, design solutions or represent the needs of others. As the name suggests, it protects these people when they've done something they shouldn't have (error) or when they neglected to do something they should have (omission). It is also referred to as Professional Liability or Malpractice Insurance. EPLI covers employers against claims made by workers who have sued the company for violating their legal rights as employees.
EPLI Costs and Triggering of Claims and Other Coverage Issues
EPLI costs are affected by factors such as the size of the company, the type of business, the number of employees, where the business is located, the number of claims and lawsuits previously filed and the length of time the company has been in business. Insurance companies may also take other factors in to consideration when deciding the cost of the premium and structuring a policy best suited for the company.
CONSIDER THESE ACTUAL CLAIM SCENARIOS
- A former employee claims she was unfairly terminated due to religious discrimination and receives $110,000 in
back pay and compensatory damages.
- A current employee files a complaint claiming she was denied a promotion due to her caregiver responsibilities as
a mother of two. A settlement of $105,000 is agreed to for the alleged sex discrimination.
Professional Liability vs. EPLI
Each covers a business owner's responsibilities to different parties. Professional Liability addresses obligations to
third-party partners and customers; EPLI focuses on the employer's professional obligations to their employees.
Employment Practices Liability Insurance (EPLI) protects your business from inappropriate workplace conduct lawsuits.
This coverage includes sexual harassment, wrongful termination, discrimination and many other claims that can arise.
EPLI provides significant coverage at an inexpensive cost.