Employment Practices Liability Insurance

Businesses that have employees must adhere to a number of federal and state laws. Should they violate any of these laws, they may be held responsible by any affected employees. EPLI is a specialized form of liability coverage that helps protect businesses from covered claims and suits that arise from covered employment infractions.

Employment liability policies generally offer coverage for all aspects of employment, including everything from interviewing prospective applicants to letting employees go. Depending on its terms, conditions, exclusions and coverages, a policy might offer protection if an elderly employee is let go because of their age, a pregnant woman was not offered a job, men and women were paid drastically different salaries, or job applicants were not informed about background checks.

Any business or nonprofit organization that has employees may be sued by their employees and, therefore, may benefit from obtaining EPLI coverage. After all, few businesses and nonprofits could afford the legal and possible settlement costs of a potential employment-related lawsuit. Nonprofits may benefit from having EPLI coverage even if they don’t have official employees. In some cases, volunteers are protected by the same laws as employees. This can expose nonprofits to potential discrimination lawsuits regardless of whether their workers are actually paid. EPLI policies that cover volunteers and employees are offered by several insurers.

Because EPLI policies frequently offer coverages that apply during the hiring process, businesses are often wise to get an employment practices liability policy before they begin the hiring process. Before businesses place their first help wanted ad, they should contact an insurance agent about employment practices liability coverage.

Following all employment laws is perhaps the best way to protect a business from potential employment lawsuits, but it’s not perfect. Any employee might file a claim against their employer and defending a business against a claim can be expensive even if no infraction was committed. Policies normally offer protection for claims where businesses are innocent or guilty, as long as the circumstances of a claim meet a policy’s terms and conditions.