Employment Practices Liability

Statistics show that a business is 3 times more likely to be sued by an employee than to experience a loss by fire. You keep yourself insured in case of fire, so why would you not include coverage that keeps you protected in case of lawsuits by your employees?

Employment Practices Liability Insurance (EPLI) covers businesses against claims by workers that their legal rights as employees of the company have been violated.

The number of lawsuits filed by employees against their employers has been rising every year. While most suits are filed against large corporations, no company regardless of size is safe from being sued. Smaller companies also need this kind of protection; some insurers provide this coverage as an endorsement to their Business Owners Policy (BOP). An endorsement can change 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:
• Sexual harassment
• Discrimination
• Wrongful termination
• Breach of employment contract
• Negligent evaluation
• Failure to employ or promote
• Wrongful discipline
• Lack of career opportunity
• Wrongful infliction of emotional distress
• Mishandling of employee benefit plans

The cost of EPLI coverage varies on your type of business, the number of employees you have, and various risk factors, such as prior employment practice lawsuits you may have endured. The policies will reimburse your company for the costs of defending a lawsuit in court and for judgments and settlements. It does not matter if your company wins or loses the suit, this kind of policy covers the cost. Liabilities covered by other insurance policies such as worker’s compensation are excluded from EPLI policies.

Some ways to prevent such claims are to educate and inform your managers and employees so that you minimize problems in the first place by:

• Avoiding discrimination in hiring by creating effective hiring and screening programs
• Having corporate policies posted throughout the workplace and document them in the employee handbook, so policies are clear to everyone.
• Demonstrating to employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor.
• Making sure supervisors know what the company’s views are on which behaviors will not be tolerated.
• Documenting everything that occurs and documenting the steps your company takes to prevent and eventually solve employee disputes.

Call us with any questions about Insurance or schedule an appointment. Let LF Insurance help you secure your future with the right Insurance policy. 303.422.2018

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