Employment practices liability insurance (EPLI) protects businesses from financial losses in the event of allegations from employees of employment law violations. The number of lawsuits employees have filed against their current and former employers has been rising, and organizations of any size can face an employment law claim.
EPLI provides financial protection in the face of many types of lawsuits, including:
- Sexual harassment
- Discrimination based on race/ethnicity, age, disability, religion, gender identity, and other protected classes
- Wrongful termination or discipline
- Breach of employment contract
- Failure to employ or promote an otherwise-qualified employee
- Wrongful discipline
- Hostile work environment
- Retaliation
- Mismanagement of employee benefit plans
The premium you’ll pay for EPLI coverage depends on the type of organization you run, how many employees you have, and risk factors related to your employment practices, including any history of employment practices lawsuits. Your policy will reimburse your company for costs related to defending a qualifying lawsuit in court and any judgments or settlements that come out of resolving the claim. The policy covers legal costs even if the court finds that the employee’s claim is justified. However, these policies typically do not cover punitive damages or civil or criminal fines. EPLI policies exclude costs that fall under other types of policies, such as workers compensation or errors and omissions insurance.
Even with an EPLI policy in place, you still need to make sure you are doing everything you can to create a safe and fair workplace, and to abide by all applicable employment laws. Even though these policies will pay out for a justified claim, your premiums will certainly increase at renewal, and the carrier may even decline to renew your coverage at all. So make sure to:
- Avoid discrimination in hiring and discipline. Maintain an equitable hiring process, and make sure your hiring managers are trained to uphold it. Our Verticlimb online training offers courses covering hiring, employment law, and best practices for employees who inherit HR duties.
- Create clear company policies to make sure everyone knows what they need to do to prevent discrimination, wrongful discipline, harassment, and other workplace misconduct. Make sure everyone has an up-to-date employee handbook, and post policies in the workplace as needed.
- Train employees and supervisors to avoid discrimination and sexual harassment, and let them know what they should do should they ever find themselves or one of their direct reports to be the target of harassment or other unjust treatment in the workplace. We offer online training in diversity, preventing unconscious bias, and one-hour sexual harassment courses that satisfy the training requirement for employers in Illinois.
- Meticulously document any claims that arise at your organization and the steps you are taking to resolve the issues and prevent them from happening again.
At Kamm Insurance Group, our professional liability experts will help you get the employment practices liability insurance you need at a cost you can afford. We can also help you implement the risk management and training programs you need to prevent claims, keep your premiums low, and, most importantly, maintain a safe and fair workplace.
Source: https://www.iii.org/article/what-employment-practices-liability-insurance-epli
