While some business owners might be under the impression that their current liability insurance would provide coverage for employee-related claims, we would suggest that you look one more time at your policy before you make such an assumption. You will be surprised to find out that your General Liability insurance, for example, includes specific clauses that specify the exclusion of employee-related claims.
As discussed on our website, Employment Practice Liability Insurance (EPLI) covers the cost of defense, indemnity, often administrative hearings and actions against the claims of workers who you employ that allege their rights have been violated. Workers’ compensation policy will no longer protect the employer from workers seeking emotional distress or rights damages.
Mistakes happen and EPLI is available to you as an employer to support and help you in case you needed to respond to claims filed by employees that are related to their employment.
The following includes SOME of the types of claims you might see coverage for:
- Wrongful dismissal, discharge or termination of employment
- Violation of employment discrimination laws (including harassment)
- Breach of a written or oral employment contract or implied employment contract
- Sexual or workplace harassment of any kind
- Wrongful demotion
- Negligent employee evaluation
- Wrongful deprivation of a career opportunity
You may want to start by asking yourself questions similar to the following as you evaluate your need for an EPLI policy:
- Are you concerned about firing your top performing employee?
- Are you meeting the needs and accommodating your employees with disabilities?
- Are you concerned about mangers interactions and work load assignments?
- Are you concerned about promoting someone who has been here a short time?
- Are you concerned about moving someone to another position with lower authority?
Without proper coverage, you will be responsible for the costs if you or your business get sued and things do not go your way.