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?”
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.
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:
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.
There are 5 risk factors in particular that make risk managers like us scream “Carry EPLI, and lots of it!” These factors are:
[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.]
Over to you: are you seeing an uptick in risky behaviors related to EPLI?
What questions do you have about this coverage? How have you mitigated this risk in your organization? Let us know in the comments!