What Is Employment Practices Liability Insurance (EPLI) Coverage?
Employment Practices Liability Insurance (EPLI) protects your business from employment-related lawsuits and claims. Learn more about how to protect your business with EPLI coverage.
What Is EPLI Insurance Coverage?
Employment Practices Liability Insurance (EPLI) protects your business from employment-related lawsuits and claims and is a stand-alone business insurance policy or the coverage can be added to your business owners policy (BOP). EPLI includes coverage for damages that can arise from employment-related claims, including wrongful termination, discrimination, harassment, and retaliation.
Even with a solid HR department, we recommend EPLI coverage for most companies as employment-related lawsuits and claims are rising. Even smaller frivolous lawsuits cost significant amounts of money and time.
EPLI Coverage Vs. Workers Compensation (Workers Comp)
EPLI and workers compensation insurance coverage protects businesses, employers, and employees very differently:
EPLI protects the business and employer from lawsuits and claims against the employer for discrimination, wrongful termination, sexual harassment, and retaliation.
Workers compensation insurance coverage, also known as workers comp, protects both the business owner and employees from the expense of on-the-job injuries or illness. The coverage provides injured employees with lost wages and medical care they need regardless of fault. Additionally, the business owner is protected against employee lawsuits over on-the-job injuries, illness, and claims. Therefore, most states require businesses to provide workers compensation coverage.
Why Do I Need EPLI Insurance Coverage?
Every day the unforeseen happens, and you should review your risk management strategies to ensure you have sufficient protection. In addition, employment practice claims and lawsuits have increased due to the legal environment, economy, and demographics. EPLI coverage helps protect your business and bottom line by protecting you from lawsuits that may arise from employees for violating their legal employment rights.
Additionally, The number of harassment claims has increased in number and severity in recent years along with the rise of social media. This leads to the number of employers being sued to increase in recent years.
How Much EPLI Insurance Coverage Do I Need?
A Business Owners Policy (BOP) can provide limited EPLI coverage, but the limits tend to be very low - up to $100,000. This limit may be suitable for small businesses. However, many times, based on your individual business needs, we recommend getting higher coverage limits under a separate policy. These limits options are:
To determine the right amount of coverage for you and your business, we consider the following:
Size of the business
Location of the business
Hiring and firing procedures
EPLI Insurance Claim Examples:
An employee has a seizure while working at a restaurant. Before the seizure occurred the owner had intentions of firing the employee for poor performance. After the employee was fired, they sued the employer for failure to accommodate their medical condition.
Employees who feel they are the victims of discrimination at work for their age, race, gender, or ethnicity.
Employees who feel they were wrongfully terminated.
Whistleblower employees who feel they are the victims of harassment or discrimination voice their thoughts at work and are punished in some way by upper management. Or an employee's pay was cut or demoted and retaliate against the employer as they believe it has nothing to do with their performance.
Is EPLI Insurance Coverage Mandatory?
No, EPLI insurance coverage is not mandatory. However, although EPLI insurance protection is not required to do business, we recommend coverage either be added to an existing business insurance policy or a separate policy to protect the business from employment-related lawsuits or claims.
EPLI Insurance Cost
Generally, the cost of EPLI insurance coverage will cost about $300 if added to your business owner's policy or up to $800 - $3000 if EPLI is purchased on a stand-alone policy. The cost of EPLI coverage is based on several factors, this includes:
Size of the business
Number of full and part-time employees
Hiring and firing standards
Industry your business is in
The Bottom Line:
Employment lawsuits are on the rise, and it is recommended all businesses carry EPLI coverage to protect their company from discrimination, harassment, wrongful termination, and many more employment lawsuits and claims.
80% of businesses are paying too much for insufficient insurance coverage, we solve this by partnering you with the right insurance company and coverage. The Overmyer Insurance Agency helps businesses make better decisions when it comes to their insurance needs. If you would like to get an EPLI quote or want a coverage review, we are here to help, and just a call or click away.