Lawsuits against businesses for employment-related acts are on the rise. Sexual harassment, discrimination, wrongful termination and retaliation are just a few of the more high-profile complaints employers face.
Could your company survive a costly high-profile lawsuit?
Defending such cases can cost your firm tens of thousands of dollars and full resolution could be a years-long process.
Employment practices liability insurance (EPLI) protects your company from costly litigation. EPLI compensates you for losses from employee lawsuits, as well as third-party claims by customers or vendors.
General liability insurance does not cover employment practices complaints. You need EPLI for these risks.
What EPLI covers
- Wrongful terminations
- Discrimination
- Sexual harassment
- Retaliation
- Defamation and libel
- Invasions of privacy
- Misrepresentations
- Failures to promote
- Employment contract breaches
- Negligent evaluations
- Benefit mismanagement
- Violations of various leave laws, including the Family and Medical Leave Act
EPLI helps pay for court costs and legal fees if you are sued, subject to the limits in your policy. An experienced insurance professional who knows the EPLI market can advise you about appropriate limits for your type of business and the size of your company.
Types of policies
- Claims made — Applies to claims filed while your policy is in force
- Occurrence-based — Covers claims that occur while your policy is in force, even if they are filed after your policy term ends
Additional coverages (by optional endorsement)
- Extended reporting periods extend claims-made policies for covered events that occurred while your policy was in force but are claimed after the policy term has expired. Also known as “tail coverage,” extended reporting periods are often recommended for companies that are changing insurers, merging with or being acquired by other companies, or closing.
- Runoff coverage is similar to extended reporting but runs for a longer period of time. It’s often used to protect acquirers or merging companies from claims against the acquired firm.
- Wage and hour insurance is often excluded from standard EPLI insurance. This coverage can be added as an endorsement or purchased as a stand-alone product to respond to any claims that your company violated wage or hour laws. (Because these claims often affect multiple employees and tend to spawn class actions, they can be financially devastating.)
Other benefits of EPLI
- Meets your company’s specific needs through custom design
- Provides access to attorneys who specialize in these kinds of complaints
- Helps reduce your exposure to employment practices problems, before a claim happens
- Complements your directors and officers liability insurance
- Can be enhanced with excess liability or umbrella insurance
- Provides first-dollar coverage for Equal Employment Opportunity Commission administrative proceedings
- Can be tailored to include prior acts coverage
Reach out today to learn more about the various ways we can cover your employment practices liability exposures. Call 800-637-4676 or email [email protected], or you may request information online.
Source: Applied Systems, Inc.
