Employment Practices Liability Insurance

You may be thinking, what is employment practices liability insurance and why is it important? This is one insurance policy that you don’t want to ignore and here’s why:

What Is Employment Practices Liability Insurance (EPLI)?

EPLI will cover you if an employee sues you or files a claim against you for something that happened during their employment with your company.

This insurance deals with emotional distress, deprivation of a career opportunity, wage disputes, breach of contract, sexual harassment, discrimination, invasion of privacy, negligent performance evaluations, failure to promote, and wrongful termination.

EPLI insures directors and officers in the organization and provides reimbursement for the costs of lawsuits, judgments, and settlements. Your legal fees will also be covered whether you win or lose in a lawsuit.

Keep in mind that this insurance will not protect you against punitive damages, civil/criminal fines, bodily harm, and property damage. You can open a separate insurance policy to help you in cases with bodily harm and property damage.

The cost of EPLI will depend on circumstances such as the number of employees you have and how many times an employee has filed lawsuits against your company.

EPLI Claim Example

Illegal background checks are one of the top four common employment liability claims. To avoid seeing this claim against your company, make sure you’re in accordance to state laws regarding background checks.

When using a person’s credit report in background checks, make sure you are complying to the rules of the Federal Trade Commission’s Fair Credit Reporting Act.

This act requires you to notify job applicants that you are requesting a credit report for employment. Before you can use their credit report, you must have written documentation from the job applicant granting you permission to run their credit.

This act also requires you to contact the job applicant if the report shows something that could affect their opportunity to be employed with you. Doing this will allow the prospective employee to challenge or correct any errors/discrepancies that the report shows.

Having EPLI is essential for your business. You don’t want to deal with claims and lawsuits later and not have any insurance coverage.

At Allied Insurance Managers, we believe in making sure you have the right policy for all your insurance needs. We know this policy among others will help you to keep your business running successfully.