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Things You May Not Know About Employment Practices Liability Insurance

Do You Know What EPLI Is?

EPLI is an abbreviation for Employment  Practices Liability Insurance. This type of insurance coverage protects businesses against claims made by workers that the company is violating their rights as employees.

The number of lawsuits filed against employers by employees has been rising considerably in recent years. Although the majority of lawsuits are filed against larger companies; no business should assume immunity from such incidents. Many companies are adding employment practices liability insurance to their business insurance policies. An endorsement on a BOP (Business Owners Policy) alters the conditions and terms  You can still purchase EPLI as an individual insurance policy instead; the coverage is generally broader and higher limits of coverage are available.   This form of coverage offers protection for several types of claims, including:

  • Discrimination
  • Employment Contract Breaches
  • Sexual Harassment
  • Wrongful Discipline
  • Promotion Failure
  • Employment Failure
  • Wrongful Termination
  • Wrongful Emotional Distress
  • Employee Benefit Mismanagement
  • Career Opportunity Deprivations
  • Negligent Evaluation

The cost of employment practices liability insurance is not the same for all businesses. The cost of EPLI  depend on the number of employees, the type of business and the history of the business. For example, a company that has faced these types of  lawsuits in the past would have a higher cost than a company with a clean record. Multiple lawsuits put companies in a much higher risk category.  Also, the turnover of employees affects the premium as well.

What Will An EPLI Policy Do For Your Business?

Employment practices liability insurance will reimburse companies for their court fees, judgment amounts and legal defense costs. Legal costs are covered regardless of whether the company wins or loses. If civil criminal fines or punitive damages are included in the incident, the policy will not cover either one. EPLI policies do not cover liabilities that are covered in other types of policies (Like a general liability insurance policy).   All companies should work with their managers and employees to minimize problems in the workplace. To make the company an optimal place to work the managers need to address issues and discuss the issues with employee.

Hiring Practices Are Important!

Companies should form good screening and hiring habits when it comes to adding new employees. This will help them avoid possible discrimination lawsuits. To make sure employees are aware of the company’s policies against negative practices, place posters in high-traffic areas of the workplace. Employers should have written policies about discrimination, internet usage and harassment.  These posters should clearly outline the company’s policies. It is also helpful to send policies to employees via email or written correspondence periodically. In addition to this, the policies should be included in employee handbooks and training manuals. If employees experience problems, they should know what to do next. For example, if an employee is the object of sexual harassment, he or she should know how to report the information and who is in charge of reviewing such reports. Any relevant incidents should be clearly documented by the company.  It is important to work quickly when these issues arise.   For more information about this type of coverage, give us a call.

 

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