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EPLI covers businesses against claims by workers that their legal
rights as employees of the company have been violated. EPL
insurance or EPLI, provides coverage to employers against claims
made by employees alleging discrimination (based on sex, race, age
or disability, for example), wrongful termination, harassment and
other employment-related issues, such as failure to promote.
Large corporations typically have substantial employment practices
insurance coverage in place and are prepared to deal with just about
any employment lawsuit. However, small or new businesses are often the most vulnerable to employment claims. That’s because they
usually lack a legal department or employee handbook detailing the
policies and procedures that guide hiring, disciplining or terminating
employees.
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Z

EPLI covers businesses against claims by workers that their legal rights as employees of the company have been violated. EPL insurance or EPLI, provides coverage to employers against claims made by employees alleging discrimination (based on sex, race, age or disability, for example), wrongful termination, harassment and other employment-related issues, such as failure to promote.

Large corporations typically have substantial employment practices insurance coverage in place and are prepared to deal with just about any employment lawsuit. However, small or new businesses are often the most vulnerable to employment claims. That’s because they usually lack a legal department or employee handbook detailing the policies and procedures that guide hiring, disciplining or terminating employees.

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.

The number of lawsuits filed by employees against their employers has been rising.

While most suits are filed against large corporations, no company is immune to such lawsuits.

Recognizing that smaller companies now need this kind of protection, some insurers provide this coverage as an endorsement to their Businessowners Policy (BOP). An endorsement changes the terms and conditions of the policy. Other companies offer EPLI as a stand-alone coverage. EPLI provides protection against many kinds of employee lawsuits, including claims of:

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Deprivation Of Career Opportunity

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Sexual Harassment

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Negligent Evaluation

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Wrongful Infliction Of Emotional Distress

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Discrimination

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Failure To Employ Or Promote

R

Mismanagement Of Employee Benefit Plans

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Wrongful Termination

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Breach Of Employment Contract

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Wrongful Discipline

The cost of EPLI coverage depends on your type of business, the number of employees you have, and various risk factors such as whether your company has been sued over employment practices in the past. The policies will reimburse your company against the costs of defending a lawsuit 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. Liabilities covered by other insurance policies such as workers compensation are excluded from EPLI policies.

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.

The number of lawsuits filed by employees against their employers has been rising.

While most suits are filed against large corporations, no company is immune to such lawsuits.

Recognizing that smaller companies now need this kind of protection, some insurers provide this coverage as an endorsement to their  Businessowners Policy (BOP). An endorsement changes the terms and conditions of the policy. Other companies offer EPLI as a stand-alone coverage.  EPLI provides protection against many kinds of employee lawsuits, including claims of:

R

Deprivation Of Career Opportunity

R

Sexual Harassment

R

Negligent Evaluation

R

Wrongful Infliction Of Emotional Distress

R

Discrimination

R

Failure To Employ Or Promote

R

Mismanagement Of Employee Benefit Plans

R

Wrongful Termination

R

Breach Of Employment Contract

R

Wrongful Discipline

The cost of EPLI coverage depends on your type of business, the number of employees you have, and various risk factors such as whether your company has been sued over employment practices in the past. The policies will reimburse your company against the costs of defending a lawsuit 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. Liabilities covered by other insurance policies such as workers compensation are excluded from EPLI policies.
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Create a job description for each position that clearly defines expectations of skills and performance.
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Conduct background checks on all possible candidates.
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Conduct periodic performance reviews of employees and carefully note the results in the employee’s file.
q
Develop a screening and hiring program to weed out unsuitable candidates on paper before calling them to interview in person.
q
Review potential loss exposures with your insurance agent and purchase adequate employment practices liability insurance.
q
Create an effective record-keeping system to document employee issues as they arise, and what the company did to resolve those issues.
q
Another option would be to hire an independent HR service company that is able create a custom handbook. Or you can retain one for monthly fee.
q
Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Make sure
supervisors know where the company stands on what behaviors are not permissible.
q
Institute a zero tolerance policy regarding discrimination, substance abuse and any form of harassment. Make sure you have an “open door” policy in which employees can report
infractions without fear of retribution.
q
Use an employment application that contains an equal employment opportunity statement along with a statement, that if hired, employment will be “at-will”; meaning their employment can be terminated at any time – for any reason or for no reason at all – with or without notice. Also ensure that your employment application does not contain any age indicators, such as date graduated high school, as this could increase your risk for age discrimination claims.
q
Develop an employee handbook detailing your company’s workplace policies and procedures, including attendance, discipline, and complaints. The employee handbook should
also contain an employment at-will statement and an equal employment opportunity statement.
q
Create a job description for each position that clearly defines expectations of skills and performance.
q
Conduct background checks on all possible candidates.
q
Conduct periodic performance reviews of employees and carefully note the results in the employee’s file.
q
Develop a screening and hiring program to weed out unsuitable candidates on paper before calling them to interview in person.
q
Review potential loss exposures with your insurance agent and purchase adequate employment practices liability insurance.
q
Create an effective record-keeping system to document employee issues as they arise, and what the company did to resolve those issues.
q
Another option would be to hire an independent HR service company that is able create a custom handbook. Or you can retain one for monthly fee.
q
Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Make sure
supervisors know where the company stands on what behaviors are not permissible.
q
Institute a zero tolerance policy regarding discrimination, substance abuse and any form of harassment. Make sure you have an “open door” policy in which employees can report
infractions without fear of retribution.
q
Use an employment application that contains an equal employment opportunity statement along with a statement, that if hired, employment will be “at-will”; meaning their employment can be terminated at any time – for any reason or for no reason at all – with or without notice. Also ensure that your employment application does not contain any age indicators, such as date graduated high school, as this could increase your risk for age discrimination claims.
q
Develop an employee handbook detailing your company’s workplace policies and procedures, including attendance, discipline, and complaints. The employee handbook should
also contain an employment at-will statement and an equal employment opportunity statement.
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