Business Insurance 101: Employment Practices Liability Insurance (EPLI)
Employment Practice Liability is one of the less discussed insurance policies for businesses. If you have employees working for you and toward your goal of a successful company, Employment Practice Liability, abbreviated to EPLI, may be one of the more significant coverages in your portfolio. EPLI is a policy that protects your company from claims by employees that your company has violated its legal rights. These serious allegations can have a significant impact on performance, employee morale, and reputation. Not to mention the financial implications of legal fees, settlements, and reduced revenue which can place huge stress on the survival of your dream.
What Does Employment Practices Liability Insurance (EPLI) Cover?
EPLI is generally designed to provide protection for your business against various types of employee lawsuits. Some prime examples include:
- Wrongful Termination
- Mismanagement of employee benefits
- Sexual Harassment
- Hostile work environment
- Breach of employment contracts
- Age Discrimination
- Pregnancy Discrimination
- Unfair practices with Compensation and/ or promotions
While EPLI can protect your company from specific instances or patterns of the aforementioned, it’s crucial to keep in mind that the majority of the time with insurance, intentional acts by the insured are not covered. This basically means that an EPLI policy won’t take action if your business consistently engages in malicious behavior. It is not designed to pay civil or criminal fines. However, if the action was unintended and appropriately addressed, EPLI should offer a defense against the accusation.
Do I Need an EPLI Policy for my Business?
It is highly recommended to have an EPLI policy as part of your portfolio if you have a staff of employees, even if it is not a requirement for businesses and there may be a small amount of coverage on your general liability/business owners policy (BOP). Both public and private companies as well as nonprofit organizations are affected by this.
Any insurance professional who monitors industry claims data will tell you that an employment-related claim is three times more likely than a company suffering a loss from a fire and that the majority of employment claim costs will end up being in the six-figure range after all is said and done. Having EPLI coverage is an important aspect and a good idea for proper risk management for your organization.
Having EPLI coverage, along with knowledge of employment regulations and sufficient training, will significantly lower your risk of suffering a catastrophic loss to the company you fought so hard to establish. Working with a team of insurance professionals who are experienced in the field will be able to not only provide a policy but also valuable resources to help mitigate an employee-related claim.
How Much Does an EPLI Policy Cost?
Multiple variables affect how much EPLI insurance may cost. Some of the more prevalent price factors are the number of employees you have, your business’s claim history with EPLI, your industry, and the amount of coverage you seek.
How can I find out more, or purchase an EPLI policy?
Your next step should be to get in touch with an independent insurance agency with experience in the field. An experienced agency will have access to a variety of markets, allowing them to identify the best match for what you are looking for. As previously mentioned, they will also be able to offer relevant information and resources to help protect you along the way.
The Staples Agency has a business insurance team that is knowledgeable about the nuances of business ownership and how to shield it from risk. Reach out when you’re ready to talk in greater detail, and one of our industry professionals will be pleased to discuss your options with you.