What is an Employment Practices Liability Insurance (EPLI) policy?

What is an Employment Practices Liability Insurance (EPLI) policy?

Employment Practices Liability Insurance (EPLI) is an important insurance coverage that helps protect businesses against lawsuits arising from accusations of harassment, discrimination and wrongful termination.

And the truth is – even if you think the risk is small – all business owners need to speak with their insurance agent about EPLI insurance because even wrongful accusations can be costly to defend.

Read on to learn why businesses of all sizes are choosing to add EPLI coverage to their business insurance.

Why do businesses need EPLI insurance?

Unfortunately, the number of employee lawsuits has been growing and they are getting more expensive. In the last 10 years, employee filings with the Equal Employment Opportunity Commission (EEOC) increased by more than 20% and the average employee-related settlement now costs almost $70,000.

Big or small – all companies face risk.

Small businesses may feel like they have more oversight and control over their employees’ behavior. But the truth is that, big or small, companies of every size face this risk. In fact, over 40% of all EPLI claims are made against private employers with fewer than 100 employees.

You can be fault-free, but it still costs money. 

Even if your company is without fault, it will still cost legal fees and defense costs, which can exceed tens of thousands of dollars. With EPLI insurance, you can help protect your business’s finances and avoid the possibility of having to close your doors due to an expensive lawsuit.

Your business insurance policy is probably missing this coverage.

Think your Commercial Liability policy has you covered in this case? Think again. Many Commercial Liability insurance policies can exclude claims that involve employer-to-employee and employee-to-customer behavior. Your Commercial Umbrella policy may exclude them as well.

EPLI coverage is available to protect businesses for both first-party (employment-related) and third-party (customer and vendor) lawsuits involving such issues as harassment or discrimination.

To be safe, contact your independent insurance agent and make sure your business has the right coverage in place to protect you from lawsuits stemming from these types of accusations.

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