What is Employment Practices Liability Insurance?
Employment Practices Liability Insurance (EPLI) is a coverage designed to protect the insured against the risks associated with running a business. EPLI policies cover a range of risks such as wrongful termination, sexual harassment, contract violations, and wage/hour law violations. In a world where courts tend to favor the employee — whether they are right or wrong — an EPL policy can be the difference between keeping a business open or not.
Why Have Employee Practices Liability Insurance?
Employee discharge is a big risk for an employer. While an employer has the right to hire and fire at will, an employee can threaten to sue for wrongful termination. EPLI covers the legal expenses if you are sued, the settlement costs should you choose to negotiate, and the monetary damages awarded by a jury if you were to lose the case. Even if the employer is innocent, the legal fees to prove it can add up quickly, so the easiest way is to simply settle the suit.
- The average total cost associated with EPL-related events is over $70,000.
- Over 100,000 charges were filed with the U.S. Equal Opportunity Commission in the last year.
- The number one area for litigation in the past three years has been labor and employment matters.
- Your company doesn’t have to do anything wrong to be sued, but will still have to pay for defense.
Many non-buyers mistakenly believe that their general liability policy will cover EPL-related events, but they will need the complete employment practices liability coverage for full coverage and protection.
What Does Employment Practices Liability Insurance Coverage Include?
- Wrongful termination
- Sexual harassment
- Discrimination (direct, indirect, sex, religion, pregnancy, age, race, etc.)
- Invasion of privacy
- False imprisonment
- Breach of contract
- Emotional Distress
- Wage and hour law violations
- Violation of the NYS Paid Family Leave (PFL) program
- Full Prior Acts coverage for claim-free accounts
Third-party EPLI is available for businesses and institutions with employees that interact directly with the public — frequently meeting with customers or dealing directly with vendors — and are therefore more susceptible to third-party claims. These include restaurants, hotels, customer service teams, contractors, transportation workers, real estate agents, legal professionals, country clubs, medical facilities, schools, and religious institutions. Third-party EPLI reimburses your business for court and legal fees, as well as any settlements between the business and the accuser, as a result of alleged wrongful acts of harassment and all forms of discrimination.
FLSA is also available on most risks, while Defense Outside the Limit may be available up to 200 employees if $500,000 limit or higher chosen (doesn’t apply to FLSA violations).
Are you covered?
Let us help you find the right business insurance solutions that meet your needs and budget to help protect your business. We are your insurance solutions provider and partner, serving Warwick, Greenwood Lake, Florida, Goshen, Pine Island, Middletown, Chester, Monroe, Newburgh, Orange County, and the Hudson Valley and Tri-State Area. For more information, please contact us at 845-986-1177, or fill out the brief quote form below and we’ll get back to you shortly!