What is EPLI?
EPLI stands for employment practices liability insurance, and is important coverage to help protect your business. EPLI covers claims by employees, past employees and potential employees alleging that he or she was terminated due to discrimination (Age, Race, Gender, Disability, etc.). Not only does the coverage trigger because of termination, but also extends to not hiring an employee for the position. EPLI is often added to an insurance policy to protect the employer in the event of such claims, almost all business insurance policies need to have this coverage specifically endorsed.
Who is exposed?
Answering the question above is pretty straight forward. If you have employees then you need employment practices liability coverage. Many business owners think if they only hire their friends or family then they do not have anything to worry about, but that is far from the truth. Many times we see the defense cost associated with these claims as the highest dollar figure. Even if a claim is completely untrue your company still needs to defend itself (defense costs are included in the policies).
- Since 2006 employee related charges have grown by 31%
- In 2012 alone there were 99,412 employment discrimination charges filed resulting in 365,000,000 in damages.
- 6 out of 10 employers have faced an employee lawsuit in the past 5 years, most commonly are private companies with between 15-100 employees
Many business owners think EPLI insurance is going to cost them a ton of premium, or that it is too expensive for them. Premiums for this coverage are fairly reasonable and depend on the size, industry, and controls your company has in place.