Employment Practices Liability Insurance – What Does it Cover?

As a business owner, you strive to be fair and nondiscriminatory in your employment practices. But even a simple misunderstanding could expose you to an employee-related claim or allegation such as sexual harassment, discrimination, abuse or wrongful termination. In today’s litigious business climate, these are damaging claims that can put you out of business. Is your business prepared for these situations with Employment Practices Liability Insurance (EPLI) coverage?

EPLI Claims Scenarios:

Whistleblowing
After an employee is discharged, he files a lawsuit alleging harassment in retaliation for reporting supervisor thefts to corporate headquarters.

Retaliation
An ex-employee alleges he was wrongfully terminated in retaliation for filing a workers compensation claim.

Gender Discrimination
A female employee with years of experience at your business files a lawsuit alleging that she was repeatedly bypassed for promotions in favor of male employees.

Improper Background Checks
A background check conducted on an employee returns a criminal record. Although the company did not provide a “pre-adverse action notice,” the employee is fired. When the employee receives the notice and a copy of the background check, he realized the check was conducted improperly and the criminal records were not his. He files a lawsuit.

Download this whitepaper: Legal Considerations, Best Practices and Resources for Proper and Fair Employee Background Checks

Wrongful Termination
A long-time elderly employee is dismissed after months of performance problems and several warnings. The employee files a lawsuit alleging she was terminated due to her arthritis.

Third Party Racial Discrimination
A group of customers are causing a scene and an employee asks them to leave. The group alleges that they were targeted because of their race and file a lawsuit.

Third Party Sexual Harassment
A male employee makes sexual advances towards a female customer. She files a complaint demanding that the employee be fired. When 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.

Read more about Sexual Harassment in the Workplace.

Why Do I Need Employment Practices Liability Insurance?

Business owners typically consider property, general liability and workers compensation as necessary insurance policies to protect their assets. But, Employment Practices Liability Insurance (EPLI) coverage is designed to protect your business from employee-related claims and allegations.

Think it can’t happen to you? Learn about EPLI myths vs. facts.

With the incidence of employment claims widespread and growing, EPLI should be an important consideration for every business owner – and provides a powerful defense against these types of costly claims. Contact your local Society Insurance agent to discuss coverage that balances your best employment practices with solid protection against employee claims.

Download this EPLI infographic to share

Author

As a mutual insurance company, we operate and exist for the benefit of our policyholders. For more than 100 years, Society has been helping businesses overcome the unexpected with comprehensive coverage packages and outstanding claims handling, underwriting and risk management.

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