What is employment practices liability insurance (EPLI)

Employment Practices Liability Insurance (EPLI) is a type of professional liability insurance that protects your business against claims by workers that their legal rights as employees have been violated.

What types of claims does EPLI cover?

EPLI covers claims such as:

• Sexual harassment
• Discrimination
• Harassment
• Wrongful termination
• Discrimination
• Wrongful discipline
• Breach of employment contract
• Negligent evaluation
• Failure to employ or promote
• Deprivation of career opportunity
• Wrongful infliction of emotional distress
• Mismanagement of employee benefit plans

How much does EPLI coverage cost?

The cost of EPLI coverage varies significantly based on factors like the size of the business and its claims history. For instance, median costs have ranged from $17,913 to $890,638 in recent years.

How does EPLI benefit employers?

EPLI benefits employers by providing crucial protection against employment practices claims, helping to cover legal costs and settlements, thereby safeguarding the business's financial stability.

Who needs Employment Practices Liability Insurance?

Any business with employees could benefit from EPLI, especially as it covers a range of employment practices claims that are not typically covered under general liability insurance.

How does EPLI differ from general liability insurance?

Unlike general liability insurance, which covers bodily injury and property damage, EPLI specifically addresses employment-related claims such as discrimination, sexual harassment, and wrongful termination.

How does EPLI interact with other types of insurance?

EPLI complements other types of insurance such as workers' compensation and general liability, filling gaps that these policies do not cover regarding employment practices.

Are there exclusions in EPLI policies?

Yes, EPLI policies typically exclude claims covered under workers' compensation, claims related to employee theft, and issues that fall under umbrella insurance.

How can businesses reduce the risk of employment-related claims?

Implementing and updating employee handbooks, conducting training on the Family and Medical Leave Act and age discrimination, and maintaining fair employment practices can significantly reduce the risk of claims.

What are the potential legal and compliance issues related to EPLI?

Legal issues can include claims related to the Family and Medical Leave Act, age discrimination, sexual harassment, and other employment practices covered under EPLI.

How can businesses measure the effectiveness of their EPLI policy?

Businesses can assess the effectiveness of their EPLI policy by reviewing the frequency and types of claims made, the outcomes of these claims, and how well the policy's coverage limits meet their needs.

How can businesses choose the right EPLI policy?

It's important to choose a policy from reputable insurance companies that offer sufficient coverage for potential employment practices claims. Businesses should consider factors such as coverage limits, deductibles, and exclusions.

What are the common exclusions in EPLI policies?

Common exclusions include workers' compensation claims, property damage, and claims covered under other liability policies.

What should I do if a claim is made against my business?

Immediately notify your insurance company, review your EPLI policy, cooperate with the claims process, and consult with legal counsel to effectively manage the situation.

Does EPLI cover legal defense costs?

Yes, EPLI typically covers legal defense costs, which can be crucial in managing the expenses of defending against employment practices claims.

Can EPLI be added to an existing business insurance policy?

Yes, EPLI can often be added as an endorsement to a Businessowners Policy (BOP), enhancing the policy's coverage to include protection against employment-related claims.