Who Needs EPLI Coverage?

JANINE TRACY
Director of People at HNI

No employer plans to have to defend their employment practices in court. They think, “I’ve got my act together. Why would I need insurance for this?” whoneedsepli3

Managing your risk, however, is about expecting the unexpected and preparing for the kinds of incidents that could put your business in jeopardy. Any company with employees is at risk for an employment practices suit.

All it takes is one disgruntled employee, bitter applicant, or mishandled firing reported to the EEOC or DOL to land your business in court.

Where and How EPLI Protects Your Business

Employment practices liability insurance (EPLI) protects your business from claims that arise when current, former, or potential employees believe they have been mistreated. Job-related law suits and claims may arise from any number of employment practices such as:

•wrongful termination

•sexual harassment

•discrimination (gender, age, religion, etc.)

•invasion of privacy

•breach of contract

•wage and hour law violations

•negligent hiring, promotion, or compensation decisions

EPLI coverage may reimburse your business for the cost of fighting employee allegations in court (whether you win or lose), and will pay for any judgments or settlements that result. It may also cover back pay, appeals, class action suits, and any administrative costs of fighting a claim.

EPLI coverage often kicks in as soon as an allegation of wrong doing is made – meaning you can control the costs of an incident by getting lawyers and specialists involved before something small becomes a full blown lawsuit.

What to Think About When Evaluating EPLI Coverage

There are 5 risk factors in particular that make risk managers like us scream “Carry EPLI, and lots of it!” These factors are:

•Size of your business

•Employee turnover rate

•Stress level involved in daily work

•Internal culture of your organization

•Leadership of your organization

[NOTE: We cover these five factors in greater detail in our whitepaper, EPLI 101: A Guide to Deciding Whether Your Business Needs this Coverage – click here to download this PDF document.]