Any company with employees faces the risks of allegations, such as discrimination, wrongful termination, breach of contract, etc. This coverage protects companies against lawsuits related to employment practices.
Home » Coverage » Employment Practices Liability Insurance
Who is Employment Practices Liability Insurance for?
Companies with one or more employees face unique challenges to navigate employment-related disputes. Unfortunately, employers can knowingly and unknowingly overstep their employees’ rights in many ways. Employment practices liability insurance (EPL or EPLI) covers businesses against claims that allege employers have violated their workers’ employment rights.
However, some industries are more litigious than others, here are some industries where EPL claims are most prevalent:
Retail
Employees come and go in the retail world, leaving room for plenty of lawsuits.
Manufacturing
It’s common for this industry to face more employment-related lawsuits than other markets.
Healthcare
The ever-evolving healthcare industry opens up many doors for costly employment-related litigation.
Professional Services
Even if allegations against your business have no merit, defense costs quickly eat away at your balance sheet.
Why you need Employment Practices Liability Insurance
Summary
In the US, lawsuits relating to employment practices are increasingly widespread. From harassment to discrimination to wage and hour disputes, these claims are not only popular, but they are easy for employees to file. Unsurprisingly, our government funnels the American workforce toward litigation — and businesses of all sizes must prepare.
Reasons for getting EPL Insurance
Protect your company from costly defense fees
Helps manage unavoidable risks of having employees
Protects against ever-growing settlement trends
Frequency
Employment-related disputes are surprisingly common. What’s more, the legal and regulatory frameworks of our federal and state governments give employees several ways to take action against their employers.
Legislation
Several statutes create varied sets of broad rules. These include Title VII, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA), to name a few federal statutes. Many states have even more stringent rules than those outlined by their federal counterparts.
Enforcement
In terms of enforcement, the US government has created the Equal Employment Opportunity Commission (EEOC) to advocate and provide recourse for individuals who feel they’ve been victimized by their employers.
What Does Employment Practices Liability Insurance Cover
If company management is named in the employment-related claim, the insurance company defends and pays the judgment or settlement against them. Even if the allegation is baseless, defense fees can mount quickly until the suit is dismissed. Plus, carriers often offer varying levels of protection; however, a tailored approach is the most effective strategy.
Wrongful Termination
occurs when an employee’s termination breachers one or more terms of a contract of breaks a rule of employment law
Discrimination
unfavourable treatment of an employee, such as failure to promote, based upon sex, race, age, or disability.
Sexual Misconduct or Harassment
involves unwanted sexual advances or obscene remarks to an employee.
Defamation of Character
this happens when a false statement is written or spoken about an employee with the intention of harming their reputation.
Invasion of Privacy
An employee alleges that an employer unreasonably searches their private space , or conducts surveillance in areas where employees expect privacy, such as a dressing room or bathroom.
EPL Insurance Claim Examples
Here are some claim examples that illustrate what Employment Practices Liability Insurance covers
An age discrimination lawsuit was brought by a highly paid 62-year-old sales representative, employed by the YounGuns. He was terminated for not meeting his sales quotas. Despite layoffs and cutbacks at the company, no documentation showed the sales rep was a poor performer. The suit was for $500,000 but was settled for $100,00 plus $15,000 in defense costs.
A group of Indian descent applicants sued a private retail store for ethnic and racial discrimination after learning they had all been denied employment strictly based on their race and ethnic background. The defense cost and settlements amounted to over $200,000.
Several female employees at a dev shop, CodingAndStuff, complained that their CEO was sexually harassing them. As required by law, the President proceeded to investigate the complaints. Within one month of the start of the investigation and without apparent backing of the board members, the President was terminated by the CEO under the pretext of performance issues, despite being given a raise a few months earlier. The President filed a separate wrongful termination suit due to the conflict between the Board of Directors and the CEO. The settlement and Defense Cost exceeded $1,000,000.
The Assistant to the Chief Financial Officer was terminated for divulging confidential information to staff regarding impending company layoffs. A suit was brought by the assistant for retaliation and sexual harassment as she claimed the CFO always made suggestive comments and improperly touched her. Defending the CFO cost over $150,000.
Employment Practices Liability Insurance FAQs
Bodily injury
Contractual liability and breach of employment contract claims
Criminal and fraudulent acts
Violation of employment laws and other regulations
The cost of EPL insurance will depend on several things, including the company’s size and the company’s stage of development. Other factors include:
Exposures: risks being insured.
Company practices: views on safety, compliance, and risk management.
Program structure: the amount of deductible and willingness for a company to assume more risk
Claims history: the type and amount of past claims against the company
How it works
Finding insurance coverage doesn’t have to be painful. We aim to make the purchasing experience as streamlined & intuitive as possible.
1
Get a quote
Use our custom built online portal to get quotes fast. We automate clerical tasks that plague the traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.
1
Get a quote
Use our custom built online portal to get quotes fast. We automate clerical tasks that plague the traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.
2
Pair with a specialist
No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.
2
Pair with a specialist
No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.
3
Stay one step ahead
To do better, you need to know better. With changing political, technological, legal and economic landscapes, staying ahead of the curve is critical.
Our in-house team is tapped into the latest developments of your industry, proactively ensuring you’re covered.
3
Stay one step ahead
To do better, you need to know better. With changing political, technological, legal and economic landscapes, staying ahead of the curve is critical.
Our in-house team is tapped into the latest developments of your industry, proactively ensuring you’re covered.
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