Protection From Claims
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Employment Practices Liability (EPLI)
According to several studies, the number of discrimination complaints against employers grew from a mere 150 to well over 100,000 in a ten year period. New Federal regulations and laws have been enacted in recent years that have created several new reasons that employers may find themselves sued for in the near future.
Employment practices liability insurance, also known as EPLI, is commercial insurance that is designed to protect your company from lawsuits brought by employees. EPLI protects the company, its officers and directors, its managers, and other employees.
The types of claims existing that employees might bring against your company or other personnel can include:
- Wrongful Termination
- Sexual Harassment
- Breach Of Contract
- Mental Or Emotional Damage
- Invasion Of Privacy
- Drug Testing
- The Mismanagement Of Employee Benefits
Soon you may hear of new claims related to the Americans with Disabilities Act and The Family and Medical Leave Act.
Whether your company or one of its employees or executives is actually guilty of the claims brought by existing and former employees is beside the point. The problem is that the costs of defending your company and its people against those claims can involve enormous costs.
General liability insurance may specifically exclude EPLI coverage for your company, and a business owners policy can sometimes offer it on a limited basis for your executives and directors and officers.
A stand-alone Employment Practices Liability Insurance policy expands both the scope and amount of coverage to help protect your company in a much fuller sense.
Depending upon how you configure your company's EPLI policy, it generally reimburses your company for expenses associated with defending court suits and paying legal settlements or judgments. Legal costs are generally covered regardless of whether your company wins or loses employee lawsuits brought against your company.
The expense to carry this valuable coverage for your company will vary based on a number of things. One of the main factors determining your EPLI policy premium is the size of your company and the number opf employees you curently employ. If your company has had previous employee lawsuits brought against it in the past, this can affect the cost of your policy premiums as well.
Your EPLI policy must be in effect before you can report any covered claims. The incident that is being claimed must also have taken place while your policy was in effect, or while it was within the extended period only if one exists on your policy.
Prevention of problems from the start is always the best approach to potential liability suits. You can help prevent lawsuits and claims by making sure your employee policies are clear and readily available. Make sure your hiring practices are in complete compliance with the law and be sure to document any problems no matter how small they may seem.
Prevention helps to limit the number of suits your company may be faced with over the years. The wisest choice is to protect yourself and your company from the start by getting a comprehensive EPLI policy while also making sure your prevention measures are the best they can be.
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