Employment Practice Liability Insurance, or EPLI, is a specialized insurance product that protects your business against claims of employee rights violations. Every year, lawsuits are filed against employers by employees who allege violations ranging from discrimination to sexual harassment to wrongful termination.
Many of these lawsuits target large corporations but you should never assume that your business is immune from such an incident. This is why adding employment liability insurance to your existing business owner’s policy is an important consideration for businesses of all sizes. EPLI can also be purchased as a standalone insurance product – often providing more generalized coverage and higher coverage limits.
Why You Need EPLI
Unlike general liability insurance, employment liability insurance is designed to protect against specific types of claims stemming from alleged employee rights violations. Some examples of claims that would be covered by an EPLI policy include:
- Breaches of employment contract
- Sexual harassment
- Wrongful discipline
- Wrongful termination
- Employee benefit mismanagement (also covered under fiduciary liability insurance)
- Negligent evaluations
- Wrongful emotional distress
- Career opportunity deprivation
The Costs of EPLI
The premiums associated with employment practice liability insurance vary depending on a few factors. The number of employees and the type of business are both factored into the total cost of the policy.
The history of the business is also an important factor. Companies who have previously experienced lawsuits of this type will typically have higher premiums than businesses with a clean record as it relates to employee rights issues.
Finally, the employee turnover rate of the business can affect the total cost of this type of business insurance.
What EPLI Covers
Employment liability insurance will reimburse a business for court fees, legal defense costs, and judgement amounts associated with an employee rights violation lawsuit. The legal costs are covered regardless of the court’s decision. If punitive damages are awarded or civil criminal fines assessed, however, EPLI will not cover these costs.
An EPLI policy also does not cover any liability that is already covered by another insurance product such as small business liability insurance.
The costs associated with defending against a lawsuit of this nature can quickly get out of hand which is why EPLI is a good investment for any business. To learn more about how an EPLI policy can benefit your business, call Peter at 888-725-7776 today.