EPLI is an abbreviation for employment practices liability insurance. This coverage protects your business against claims made by your employees that say your company is violating their rights as employees. The number of lawsuits filed against employers by employees has risen in the last few years; the average cost of a settlement in 2013 was $173,000 (excluding defense costs)*.
Although the majority of lawsuits are filed against larger companies, no business is immune from these types of claims. Most insurance companies are recognizing the need for this coverage and most are adding to their standard business insurance policies; this can be done by adding the endorsement onto the business owner’s policy.
However, some companies offer EPLI as an individual policy instead. This form of coverage offers protection for several types of claims, which include the following:
- Employment Contract Breaches
- Sexual Harassment
- Wrongful Discipline
- Promotion Failure
- Employment Failure
- Wrongful Termination
- Wrongful Emotional Distress
- Employee Benefit Mismanagement
- Career Opportunity Deprivations
- Negligent Evaluation
In order to prevent lawsuits, all companies should work with their managers and employees to minimize problems in the workplace. Some ideas of this would include:
- Address issues before they arise.
- Take measures to make your company an optimal place to work.
- Form good screening and hiring habits of all new employees.
- Place posters in high-traffic areas of the workplace. These posters should outline your company’s policies.
- Send policies to your employees via email or written correspondence periodically. Also include the policy in your employee handbook/training manuals.
- If an employee does experience a problem, they should know the next steps to take. (i.e. who do they report the incident to; how to report them)
The cost of EPLI is not the same for all businesses. Premiums depend on the number of employees, the type of business and the history of the business. For more information about EPLI coverage give our office a call and we will help tailor coverage your business’ needs.