Employment Practices Liability Insurance. If you own a business, you have probably heard of this coverage, or perhaps you know as EPLI. But what is and why your business need?
More than half of all applications for employment practices liability are filed against small businesses. EPLI provides them protection against these claims by employees - claims which are generally excluded from most general liability policies. Discrimination, wrongful termination and harassment are examples.
So please you need this coverage? Well ... maybe! Consider first the change in today's workplace has several challenges. A diverse workforce can bring on issues relating to discrimination based on race or gender. And most of us have felt the "squeeze." Economic unemployment is high and those seeking jobs can feel that the employer's hiring practices are discriminatory. Factor in that the United States has won the dubious title of the "litigious society," and you can understand why business owners are faced with a major exhibition in employment claims.
So the workplace is an environment for potential prosecution. And anything that might make one of those for your small business? While 75% of these trials prove unfounded, the business owner must still defend themselves. The Equal Employment Opportunity Commission (EEOC) complaint takes on average more than a year to resolve and a majority of these claims eventually to be between $ 20 000 $ 40 000, causing major financial difficulties of a small business at a time time and money. And while 75% of all EPL claims are baseless, legal fees can still be more than $ 25,000. . In a word, the employee claims can severely damage the reputation of a company, and means of financial subsistence
look what a EPLI policy generally covers:
- Wrongful dismissal, discharge or termination.
- harassment, including sexual harassment.
- discrimination, including that based on age, race, color, national origin, religion, sexual orientation, pregnancy, or disability.
- Retaliation (which could result from employee making the claim of a job or an employer that makes the work of the employee so uncomfortable that the employee feels forced to leave) .
- failure to employ or promote individuals, libel or slander (written or spoken falsehoods individuals), humiliation, defamation, invasion of privacy, false imprisonment
Some policies also include coverage for third -. coverage for customers, suppliers or customers of a business owner. So if your employee is harassing a client and the client sues you, with EPLI policy you have some coverage to handle the request.
What is not covered by an EPLI police?
- criminal acts
- bodily injury and property damage
- of accidents at work, social security, unemployment, disability or retirement benefits
- contractual liability - if a business owner does not comply with a contracted agreement
- Acts that the insured had prior knowledge, notice, or under any prior litigation
now you may be wondering, "Do I qualify for EPLI coverage?" Every company is different, but in general, the insurance companies want to know that:
- You are in a good financial situation. This is relative, but most require the company to have been in continuous operation without bankruptcy filings for at least three years.
- All job applicants must complete and sign an application form.
- You keep, use, and communicate to employees that there is an employment manual, either in a manual or website. The material in the manual needs to properly advise employees of their rights to work free of harassment and discrimination in the workplace.
- There was, and there will be in the future, dismissals or higher planned reductions a certain percentage of your employees in total.
Even in the best case, despite the moral and ethical you are, the risks are still very real, regardless of company size. Not only a policy EPLI provide financial protection for damages and defense costs, service complaints provided by a EPLI carrier are generally specialized and representatives are skilled in handling the complex nature of the charges and allegations related employment.
Talk to your insurance agent to see if EPLI is a good choice to cover for you.
covers liability insurance employment practices described here are in the most general terms, and subject to the conditions and actual policy exclusions. For the actual wording cover, conditions and exclusions, see the policy or contact your independent insurance agent.
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