What is Employment Practices Liability Insurance?

What is Employment Practices Liability Insurance?

Employment Practices Liability Insurance covers the biggest problem areas of the law today – sexual harassment, discrimination and wrongful termination. It also covers broad judgments, back pay, appeals, bonds, class action suits and administrative changes.

Why do I need EPLI Insurance?

In today’s litigious society, many people sue first and ask questions later. EPLI is specifically designed to protect employers from lawsuits brought on by employees.

Over the last two decades, employee lawsuits have risen roughly 400%, with wrongful termination suits increasing more than 260%. Almost half of all EPLI lawsuits are against private companies with less than 100 employees.

When evaluating your insurance needs, it’s important to incorporate some limit of employment liability, most Business Owner policies will have a base limit of $10,000, but this limit will not cover most legal fees to defend against a claim. Daigle & Travers recommends high limits and by working with one of our licensed professionals, we can help you determine the proper coverage. Even if an employer has done nothing wrong, they’ll still need to hire an attorney to defend against the allegations. The cost can easily exceed $50,000.

Why is it important to renew & maintain coverage for an EPLI policy?

EPLI coverage is written on a “claims made” basis. This means that a claim must have occurred during the experience period (which could extend back years or even decades). Coverage must still be in effect at the time a claim was filed. Often claims can occur years later.

What are the top reasons employees sue an employer?

1. Gender Discrimination
   • A female employee has years of experience at your business. She files a lawsuit alleging that she was repeatedly bypassed for promotions in favor of male employees.
2. Illegal Background Checks
   • An employee is fired for having a criminal record. It turns out that the background check was incorrect and referencing another person.
3. Sexual Harassment
   • A male employee makes sexual advances towards a female customer or coworker. She files a complaint demanding that the employee be fired but no disciplinary action is taken. She files a lawsuit alleging that the company was advised of inappropriate conduct but did nothing to prevent future actions.
4. Wrongful Termination
   • A long-time elderly employee is dismissed after months of performance problems and several warnings. The employee claim age discrimination.
5. Harassment

Choosing the correct EPLI Policy

Each business has a different need when it comes to EPLI coverage. A business owner’s needs may vary based on the industry you operate in and the state you are based in. By working with an independent agent, you can be better prepared to protect yourself and your company.

 

Daigle and Travers’ three convenient locations in Fairfield County (Darien, Westport and Wilton) are nestled between Stamford, Rowayton, and Southport. We also serve Greenwich, Weston, Ridgefield, Redding, Easton, Trumbull and parts of Westchester County and Long Island. We’ll give you the information and options to make the best choice of insurance company and policy for your EPLI. Give us a call today at (203)-655-6974.

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