Make employment decisions with confidence.

Employee practices liability insurance provides coverage for many types of employment-related claims, including allegations of illegal discrimination, sexual harassment and retaliation. Claims involving mismanagement of employee benefits and breach of employment contract can also be covered.

However, claims involving wage and hour disputes are frequently excluded. If your EPLI policy provides coverage for wage and hour claims, it is likely severely limited and may only include legal defense costs, not any awards or settlements. See your policy for other exclusions, restrictions and limitations.

EPLI claims often include wrongful termination, failure to promote, infliction of emotional distress, deprivation of career opportunities or failure to hire based on illegal discrimination. Claims of retaliation are also common.

For example, a job candidate who was not offered a position may file a lawsuit alleging that they were more qualified than the person or people who received the offer and that they were passed over on the basis of a protected class, such as their race, gender, disability or religion. Likewise, an employee who has been passed over for a promotion may claim that the employment action was taken for illegal and discriminatory reasons. Claims involving wrongful termination are particularly likely to occur, making the wrongful termination insurance coverage aspect of EPLI very important.

Allegations involving sexual harassment are also common. The employer may be held liable when harassment comes from a manager or boss, or even when it comes from a coworker, vendor or customer if the employer fails to take action to protect the worker.

Claims of retaliation often occur alongside other claims. For example, if an employer cuts a worker’s hours or takes other negative actions after the employee has complained about sexual harassment, the employee may file a lawsuit alleging sexual harassment and retaliation.

Yes, EPLI is significantly different from workers’ compensation and general liability insurance. General liability insurance typically provides coverage for third-party claims, such as bodily injury or property damage experienced by a customer. It does not cover claims related to employment decisions. Workers’ compensation provides coverage for worker injuries and illnesses, but it does not cover claims involving hiring or firing actions, harassment, discrimination or other claims covered by employee liabilities insurance.

The cost of EPLI coverage depends on your specific circumstances, including the number of employees and your loss history. Small businesses typically pay much less for coverage because they have fewer employees and therefore have reduced risk of a lawsuit. You may also be able to secure employment liability coverage as part of a bundled business owners policy, and this can be an affordable way to secure EPLI protection.

If you have any employees – even just one – you have EPLI risks. Lawsuits don’t have to come from employees. Job candidates who believe they were unfairly discriminated against can also file lawsuits.

For example, imagine you have two job candidates who make it to the final round of consideration. One candidate has more experience, but this candidate is also rude and does not seem like a good fit for your company. The other candidate lacks a couple of skills you were looking for, but this candidate seems like a good team player who is dedicated to learning. You go with the second option, and the other employee files a lawsuit alleging discrimination on the basis of race or gender. Hopefully, you’ve documented your hiring process well enough to argue your case, but you’ll still need to go through an expensive legal process.

EPLI insurance offers important protection for all employers, regardless of size.

To get an EPLI insurance quote, you’ll need to answer a few questions about your company. Use the link before to get started.