Some medical practices think that malpractice insurance is the only coverage they need. That's not at all correct. Generally, medical offices need multiple types of coverage, including employment practices liability insurance. Sometimes called EPLI coverage, protection can insure businesses against claims of misconduct lodged by employees. Why then, as a medical professional, do you need this coverage? How can it benefit you?
At the end of the day, EPLI coverage protects your practice in its capacity as an employer. Use coverage to safeguard your duties to your employees.
What is EPLI Insurance?
The relationship between employees and their employers remains tantamount to professional business practices. Nevertheless, challenges might arise that call this professionalism into question.
Every day, employees allege misconduct by businesses during hiring, termination or employment. Given that businesses must treat employees appropriately, misconduct will often give harmed parties grounds to take action. Resulting lawsuits or other challenges might prove damaging and costly to the practice. To help mediate this risk, EPLI coverage can step in.
EPLI coverage pertains to liability risks related to your hiring and retention practices. If an employee or prospective hire alleges that you committed an inappropriate offense, you can turn to your EPLI policy.
Since your practice is a business, you'll need to have this coverage as part of your liability insurance portfolio. Where policies like general liability and malpractice insurance might pertain to patients, your EPLI insurance will pertain to employees. Thus, consider coverage like a cog in the machine that creates a safe working environment.
How does it work?
EPLI insurance doesn't pertain to physical injuries or property damage liabilities. It also doesn't pertain to malpractice claims. Instead, it covers mistakes made in the course of hiring, work or termination. If an employee alleges mistreatment, coverage can step in to protect the business.
Covered claims might include charges of:
- Discrimination based on age, sex, race, disability or other protected status
- Wrongful termination
- Harassment, including sexual harassment
- Failure to compensate or manage benefits
- Failure to promote
- Improper discipline or reviews
- Breach of contract
- Libel or slander, defamation
- Invasion of privacy
In the event of a lawsuit, a claim on your policy might help you fight back. You can get help with legal fees, settlements and related costs. Often, regardless of whether you win or lose a suit, your EPLI coverage will honor a claim. Thus, coverage can help businesses and employees receive adequate compensation by law.
Who does the policy cover?
EPLI policies generally pertain to directors, employees and other entities. However, who receives coverage on your policy might vary.
Usually, the following parties can make EPLI claims against the business:
- Current employees
- Former employees
- Prospective hires
Think about who in your business will interact with these parties. You'll need to ensure that your policy addresses these individuals in this coverage. Most policies need policyholders to name the parties insured. Generally, you should name on your coverage:
- The company itself
- Most employees, including full-, part-time and seasonal staff
- HR personnel (including managers with hiring authority)
- Certain volunteers
- Directors and officers
- Certain subsidiaries and independent contractors
Whether your policy covers each of these parties depends on your coverage. Talk to one of our agents about how to establish the appropriate coverage within your policy. Never assume that coverage will extend to all parties in the practice. If you have concerns for certain employees, ensure they have coverage on this policy.
How much does coverage cost?
Every medical practice is different. Therefore, the amount of EPLI insurance you ultimately carry will need to be specific. As a result, the costs of your policy will vary from practice to practice. Practices can expect to pay anywhere from a few hundred to a few thousand dollars per year on coverage. As a rule of thumb, smaller practices often pay less for their coverage. Even so, mitigating factors still apply. Some of the items influencing your policy costs might include:
- Your coverage limits. Carrying a $500,000 policy as opposed to a $1 million policy will likely equal a lower premium.
- Previous claims history. If you've faced EPLI claims in the past, your risk to insure will likely increase. Therefore, your premiums might go up as well.
- The number of employees in the practice. More people to insure equals more cost.
Also, your hiring and firing practices can increase or decrease your risks of claims. Therefore, it's up to you to put in place practices that treat all employees and potential hires fairly. The more care you take to reduce your practice risks, the lower your premiums might prove. The agents at Joseph K. Britton insurance are happy to work with you to determine the appropriate type and amount of EPLI insurance. We'll make sure you have what you need, without burdening you with excess coverage. Talk to one of our agents about your practice's needs today.