Employment practices liability insurance

EPLI insurance

You do your best to treat your employees fairly. But employment law is complex. And with new regulations added all the time, it’s hard to keep on top of them.

Thing is, rules are rules. Break them – even by mistake – and you’ll soon know about it. Discrimination, wrongful termination, sexual harassment, failure to promote…

Workers know their rights. Employment suits are on the up. And defending an EPL claim? Well, that’s going to cost you.

Employment practices liability insurance can take care of the costs of an employment-related claim. Unless it’s a claim for employee injury, or accident, in the workplace. For that, you need workers’ compensation insurance.

• What is employment practices liability insurance?

  Employment practices liability insurance (EPLI, for short) protects your business from employment suits brought by potential hires, employees currently on your payroll, and terminated employees.

  It covers you, your directors and your management personnel for wrongful acts arising from the employment process.

  It doesn’t just cover the most common kinds of claims, for wrongful termination, discrimination, sexual harassment, and retaliation. Your policy can cover claims for a host of other examples of workplace misconduct. Like defamation, invasion of privacy, failure to promote and breach of contract.

• Why do I need employment practices liability insurance

  Say you let one of your workers go because he took too much sick leave. Next thing you know, you’re slapped with a claim for violation of the Americans with Disabilities Act.

  Turns out he’s diabetic. He’d asked for regular breaks to take his insulin shots and your manager told him no. And he got sick.

  There’s no way to sugar-coat it. Settling a claim like that’s going to cost you. Around $125,000 if it goes to court. Plus, an award of around $325,000.

  But it’s not just the money. Or the time you’ll spend dealing with the case. (Because, boy, do they drag on.) Employment suits can seriously damage your reputation.

  If you’ve got EPLI coverage, you’ll get an expert lawyer to defend you, your legal expenses paid, plus compensation, if you’re liable. Even if the claim is groundless.

• What does EPL insurance cover?

  With up to $1 million paid for your defense costs, claims covered include:

  • Sexual harassment
  • Discrimination
  • Wrongful termination
  • Breach of employment contract
  • Negligent evaluation
  • Failure to employ or promote
  • Wrongful discipline
  • Deprivation of career opportunity
  • Wrongful infliction of emotional distress
  • Immigration violation

  Our EPL policies can also protect you from the cost of claims for Fair Labor and Standards Act (FLSA) offenses.

  Common offenses include:

  • Not paying overtime for time worked over 40 hours in a week
  • Misclassification of exempt/non-exempt employees
  • Paying lump sums instead of 1.5 times the normal hourly rate
  • Allowing employees to waive their rights under the FSLA

  Without this coverage, an FSLA claim will cost you. Here are a couple of real claims examples to give you an idea just how much.

  A small medical equipment manufacturer was forced to pay $78,200 in back wages and $21,000 in attorney’s fees when it was discovered they intentionally misclassified 5 employees as exempt.

  Four janitors who weren’t paid for overtime won $103,736 for overtime pay and damages. An additional $27,656 was paid to defend the claim.

  What EPLI doesn’t cover, are claims made by employees as a result of a work-related accident or injury. You want workers’ compensation insurance for that. It can take care of an employee’s lost wages and medical bills, plus your legal expenses if you get sued.

  So, for complete protection for you and your employees, your best bet’s to get both policies.