What is employment practice liability insurance?
EPLI covers businesses against claims by workers that their legal rights as employees of the company have been violated.
EPLI coverage can be obtained as an endorsement to their Business Owners Policy (BOP) or as a stand-alone policy.
EPLI can provide protection against claims of:
- Sexual and other forms of harassment
- Discrimination (based on sex, race, age, disability, etc.)
- Wrongful termination
- 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 benefit plans
These claims are usually not covered by general business liability insurance.
With employment lawsuits becoming more prevalent, small and new businesses can be the most vulnerable to employment claims as they may lack the legal resources of a large corporation.
They also may not have an employee handbook that details the policies and procedures to guide hiring, disciplining, or terminating employees.
Benefits of Employment Practice Liability Insurance
An EPLI policy will reimburse a business for the costs of defending a lawsuit and for judgments and settlements. While EPLI covers legal costs, whether a business wins or loses the lawsuit, it doesn’t pay for punitive damages or civil or criminal fines.