Do you have employees? Then you need Employment Practices Liability Insurance. EPLI covers businesses against employees who claim that their legal rights as employees have been violated whether intentional or not.
The number of EPLI lawsuits is staggering. You don’t have to be a large corporation to be at risk. Even with one employee, you are not immune to such lawsuits. The Equal Employment Opportunity Commission (EEOC) recorded 72,675 suits of workplace discrimination in 2019 alone.
No one wants a lawsuit brought against them, especially one that could harm their company’s reputation. Lawsuits can also be financially devastating. According to a recent report, the average cost to defend and settle an employee discrimination lawsuit was $160,000! That would be a crippling loss to many small to medium-sized businesses.
EPLI can be included in Business Owner Policies (BOPs) or can be purchased as a stand-alone policy. So, what is the big deal you say? Let me give you a few examples of how you can be sued.
- Sexual harassment
- Wrongful termination
- Breach of employment contract
- Negligent evaluation
- Failure to employ or promote
- Wrongful discipline
- Deprivation of career opportunity
- Wrongful infliction of emotional distress
- Mismanagement of employee benefit plans
Did any of the above-mentioned examples make you cringe a tad? Yea – how in the world do you protect yourself as an employer from claims of “failure to employ or promote” or “wrongful infliction of emotional distress” as those are BROAD accusations and can fit a variety of complaints! It is easy to be protected though – purchase EPLI insurance!
The cost of EPLI coverage depends on what your business does, how many employees you have, and whether or not you have ever been sued by an employee in the past. An EPLI policy will pay for defense costs, judgements and settlements. In fact, the policy will pay for your legal fees whether or not you win the case.
After you have purchased EPLI insurance, do your best to prevent employee lawsuits in the first place by creating an effective hiring and screening process, having a thorough employee handbook which makes office policies and procedures crystal clear, and take precautions to prevent sexual harassment or employee discrimination. We know you want to be a great employer!
Our job is to educate you on your exposures. Consider yourself a teensy bit educated on EPLI! Give us a call to get a quote on EPLI, or to learn about other lines of insurance.