Employment Practices Liability Insurance Policies


Business owners have insurance to protect themselves against claims or lawsuits filed by customers, delivery people and others who visit their place of business. But some are unaware of (or have ignored) the threat posed by their own employees.

The number of lawsuits filed by workers against their employers or former employers is on the rise, according to the Insurance information Institute.

Employment Practices Liability Insurance Policies

What kind of lawsuits might employees file?

Insurance companies report a rising tide of litigation based on companies’ employment practices. Some employee lawsuits claim that the employer has violated some part of the employment contract implied in the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964, or similar laws.

The employee may claim some kind of discrimination – age, race, religion, sex or national origin. Some allege sexual harassment, wrongful termination, infliction of emotional distress and breach of contract, or a violation of the Family Medical Leave Act. Depending on where you live, your workers could also make a discrimination claim based on protected status (such as sexual orientation ) that’s not covered by federal law but might be included in state or local laws.

How can I protect my business?

We tell our clients that good human resource policies and well-trained managers help reduce the risk of employment practices-based suits. However, any employee who believes he or she has been treated unfairly can take action against you. Smart business owners further protect themselves with Employment Practices Liability Insurance (EPLI).

EPLI can save the day if you’re threatened by a claim or lawsuit filed by an employee, former employee or employment candidate with regard to their employment relationship with you. EPLI is a specialized policy that covers the cost of defense, indemnity, and often administrative hearings and actions against the claims of workers who allege their rights may have been violated.

Isn’t this covered by workers’ comp?

Workers’ compensation policies will no longer protect you from workers seeking emotional distress or rights damages. You should also know that EPLI policies will generally exclude punitive damages and civil or criminal awards.


How can I make sure my business is protected?

Business owners trust Peter Green Insurance Agency to advise them on this complicated topic. Our staff can show you a number of Employment Practices Liability Insurance policies with different terms and conditions, and help you select one that meets your specific requirements. An EPLI policy tailored to your company’s needs coupled with a proactive employee practice program is the best approach to reducing employee claims.