Employment Practices Liability (EPLI)

What is Employment Practices Liability Insurance (EPLI)?

EPLI is coverage that protects employers against employee allegations of a violation of their legal rights. Although most suits are filed against large corporations, every company regardless of size is subject to such lawsuits.  The rising number of lawsuits being filed by employees against their employers make this coverage more crucial to ensure your business is protected.  EPLI provides coverage for the associated defense costs as well as provide expertise and guidance with the claims process.

What does EPLI cover?

The EPLI policy provides coverage against many employee lawsuits, including:

• Discrimination
• Wrongful termination
• Sexual harassment
• Failure to employ or promote
• Mismanagement of employee benefit plans

Even if the claim is groundless, it still must be defended to protect business assets, and the associated costs can be staggering. 

Who needs EPLI coverage?

If you answer yes, to even one of the below questions, then YOU need EPLI coverage.

• Do you hire or fire employees?
• Do you evaluate employees or contractors?
• Do you demote or promote employees?
• Do you supervise employees or contractors?
• Do you offer raises to employees?
• Do you communicate to or about employees?
• Do you manage benefits for employees?

What is the cost of an EPLI policy?

Like any insurance policy, there are a variety of factors that determine the cost, such as the number of employees, percentage of employee turnover, any prior lawsuits, and whether you have rules and practices in place. 

There are several steps you can take to lower your risk and your cost.

• Develop an employee handbook
• Create job descriptions for each position with defined expectations
• Perform background checks on all candidates for employment
• Use an employment application that includes the equal employment opportunity
• Conduct periodic performance reviews
• Establish a zero-tolerance discrimination policy
• Document employee issues and resolutions
• Understand the employment laws

An employee can allege wrong-doing even if you have done nothing wrong. Employment practices liability insurance protects you and your business when these costly and common claims are made.  Most businesses carry property insurance to protect against fire; however, you are more likely to be sued by an employee. Small businesses are at an increased risk because they normally do not have a human resource team to handle employee disputes so that they do not become lawsuits.

Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance advisors and see how painless insurance shopping can be.