Employment Practices Liability Insurance
Essential Protection Against Employee Claims
Employment Practices Liability Insurance, known as EPL insurance or EPLI, provides coverage to employers against claims made by employees alleging discrimination, wrongful termination, harassment, retaliation, and other employment-related issues.
Large companies typically have substantial employment practices insurance coverage in place and are prepared to deal with most employment lawsuits. However, small businesses are often more vulnerable to employment claims. One reason for this is that they frequently lack a legal department or company handbook that details policies and procedures that guide hiring, disciplining, and/or terminating employees.
At Century Insurance Group, we provide liability risk management tools and essential insurance coverage that protects your business from claims that may potentially harm its reputation and cause financial hardship. We will create an EPLI policy that safeguards the best interests of your business and gives you peace of mind.
Other claims against which EPLI provides protection include:
- Sexual harassment
- 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 benefits plans
The cost of EPLI coverage depends on a number of factors, including the number of employees in a company, whether or not prior suits have been lodged against the company, the percentage of employee turnover, and if a company has established rules and practices in place. EPLI can be offered as an endorsement to a Business Owner's Policy (BOP) or as a specific stand-alone policy, depending on the size of a company.
EPLI coverage is usually written on a claims-made basis. This means an incident resulting in a claim must have occurred during a period of coverage. Employment claims often come months or even years after an alleged incident, so an employer can be vulnerable if insurance coverage was dropped or if tail coverage (liability insurance that extends beyond the end of a policy period) was not purchased.
Companies can decrease their chances of being the target of a lawsuit if they purchase employment practices liability coverage. One reason for this is that when companies purchase EPLI most insurers review the companies’ employment practices and make recommendations that reduce their risk before insuring the company.
EPLI policies reimburse companies for the costs of defending a lawsuit in court and for judgments and settlements. They cover legal costs regardless of whether or not a company wins or loses a suit. Policies typically do not cover punitive damages or civil or criminal fines. Liabilities covered by workers compensation are excluded from EPLI policies.
There are numerous types of employment practices liability insurance coverage so it is important to talk with a specialist at Century Insurance Group. We can help you identify the best options for your business so that you can ensure its protection.