Running your business has its rewards but an employee-related lawsuit from a current, former, or potential employee can be very strenuous. Without Employment Practices Liability Insurance (EPLI), defense costs could run in the tens of thousands.
What is EPLI?
EPLI is short for Employment Practices Liability Insurance and it is an insurance policy designed to protect businesses against lawsuits or claims brought against them by the past, present, or potential employee. EPLI could even extend to 1099 workers or leased employees. Coverage is issued on a claims made basis with a retro beginning date for losses arising out of alleged wrongful employment acts. The key word is alleged, and below are reasons why such suits are brought against the business:
- Sexual Harassment
- Racial Discrimination
- Religious Discrimination
- Disability Discrimination
- Failure to Promote
- Wrongful Termination
- Wrongful Discipline
Consider these statistics from the U.S. Equal Employment Opportunity Commission (EEOC): in 2014 alone, more than 88,000 charges of discrimination were filed, with businesses paying out $296 million for claims brought against them for wrongful employment acts, a new all-time high.
The EEOC adds that the vast majority of claims – 81 percent – were settled for an average of $22,400 to $40,500. Such a financial hit if your business isn’t prepared for it can ruin plans for growth, cause cutbacks, or even close down the business. It’s a risk that you don’t want to take!
How Does EPLI Coverage Work?
EPLI covers acts anywhere in the world, as long as the suit is brought in the U.S., its territories and possessions, Puerto Rico, or Canada. Limits of EPLI start at $50,000 and can go as high as $15 million, with higher excess limits available. EPLI also covers acts committed via social media, essential in today’s digital age.
Finally, EPLI policies provide access to useful EPLI information and resources like employee handbook templates, employment practices procedures, and EPLI training information. In addition, business owners will have access to a legal advice line that offers an experienced attorney that can provide general counsel on employment issues.
With some EPLI policies, defense costs are covered where no monetary relief is sought by the plaintiff. Many policies provide defense outside the policy limits and a broad definition of Individual Insured that includes leased employees, automatic Third Party Liability coverage, bilateral discovery for one, two, and three year terms, Employee Risk Management Services, and an available sub-limit for defending against wage and hour claims.
How Much Does EPLI Cost?
EPLI is affordable for businesses of all sizes. D. Ward Insurance Services can usually add EPLI as an endorsement to an existing business policy for anywhere from $250 to $1,000 a year. Standalone EPLI start at $1,000 annually.
D. Ward Insurance would be happy to answer any questions you may have about EPLI or to begin the process of getting an EPLI policy. Call us today at 770-974-0670 or click the button below to fill out a quote request form. We look forward to doing business with you!
The information and claim examples given in this material are for illustrative purposes only and should not be construed to modify language of the insurance policy or in any way influence coverage analysis under the policy for any specific claim. The insurance policy contains the specific terms and conditions of coverage and supersedes any information contained in this document. Some of the coverage mentioned in this material may not be applicable in all states or may have to be modified to conform to applicable state law. Some coverages may have been eliminated or modified since the printing of this material.