What is EPLI and What Does it Cover?
An EPLI policy will protect your company against claims of:
- Wrongful termination
- Employment-related emotional distress and invasion of privacy
- Retaliatory/constructive discharge
- Sexual harassment and discrimination
- Workplace torts such as slander
EPLI coverage generally includes the cost to defend against the charges plus any damages you are ordered to pay. Depending on your business needs, it might make sense to purchase EPLI coverage as part of your company officers’ liability insurance since company officials can be named in lawsuits against the business.
Why You Need Employment Practices Liability Insurance
Workplace discrimination claims can affect businesses of all types. For example:
- Thirteen current or former computer company employees claimed employment discrimination on the basis of race and national origin. Employees claimed they were treated unequally and subjected to a hostile work environment. Amount of settlement: $635,000 (salary increases, enhanced promotional activities).
- Eight employees filed a class action suit alleging sex discrimination by their employer in the handling of wages, promotions, pregnancy leaves, and other conditions of employment. Amount of settlement: $600,000 (plus $5 million in legal fees).
- A senior regional attorney sued a securities dealer claiming age discrimination and retaliation. He claimed he was unfairly terminated for advice he gave to a co-worker regarding his employment rights. Amount of verdict: $443,000.
As an employer, you do everything you can to treat your employees fairly. However, you can be held liable for the actions of your employees or even vendors and customers. And with new employment-related regulations being added to the books frequently, it can be difficult to understand exactly what you are expected to do.
It is important to make sure you remain in compliance with laws governing treatment of employees. But there is an added layer of protection you can obtain: Employment Practices Liability Insurance, or EPLI.