Employment Practices Liability Insurance
Just what is Employment Practices Liability Insurance and why should you purchase it for your business?
Employment Practices Liability Insurance, also known as EPLI or EPL, is a insurance coverage which insures your business for claims of breach of contract, discrimination, emotional distress, false imprisonment, invasion of privacy, sexual harassment, wage and hour law violations, as well as wrongful termination. While some people think that it may be covered under their Professional Liability or their Workers Compensation that usually are 
not. Employment Practices Liability Insurance is generally written in conjunction would those products but tends to be separate. We have written policies for this on a Directors & Officers policy but it was not covered within those limits and was listed as its own separate limit.
With the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, Civil Rights Act of 1964, the Civil Rights Act of 1991, and the Family and Medical Leave Act (FMLA) you will find that you are more liable today than ever before and the reality is that you could be the target of legal action in the future.
In 2012 alone there were over 99,000 cases reported to the EEOC (Equal Employment Opportunity Commission) which contained the type of insurance claims that would be covered under a Employment Practices Liability Insurance. The highest percent of these complaints were; Retaliation, Sexual Harassment, followed by many other cases. If you look at the numbers on the EEOC website you will see a steady increase of both the number of cases that they have received while the number of Monetary Benefits has shifted from year to year.
Did you know that in 2012 the EEOC reports Monetary Benefits at over $365,400,000 and this number is only increasing!
Employment Practices Liability Insurance Claims Example
Employment Practices Liability Insurance settlements can run a business to very high levels with the average defense cost per case at $15,000 and the average Employment Practices Liability Insurance settlement over $80,000. A recent client of mine had three old employees sue for discrimination and he was told while everything looked like he would win, his defense costs would be over $75,000 in each case. He was then told if it went to a jury trial he would be looking at over $120,000 in defense costs and the reward could be hundreds of thousands – in each case and he had no coverage. Luckily, he was able to get them dismissed at a great cost to both the owner of the business personally and his business while he could have purchased an Employment Practices Liability Insurance at a low annual cost.
Employment Practices Liability Insurance – Features
When it comes to Employment Practices Liability Insurance like most insurance policies you do have some parts that can cost more, if you want the extra coverage.
- Defense Costs Outside the Limits – With many carriers they include the defense costs within the limit of the Employment Practices Liability Insurance policy. You can purchase the ability to have the defense costs outside of it.
- Prior Acts Coverage – A Employment Practices Liability Insurance is a claims made policy so there is no coverage prior to your purchase, however some carriers will offer prior acts coverage to insure you before you purchased.
- Third Party Coverage – The standard Employment Practices Liability Insurance policy insures you for claims made from your employees, third party coverage is if an prospective employee, customers, vendors, or suppliers.
So, while the number of claims is increasing you can understand that one day you may get an old employee go to the EEOC and you might as well have Employment Practices Liability Insurance.
Understanding your risk factors when it comes to claims as well as purchasing an Employment Practices Liability Insurance policy is the first steps to shield yourself and your business from these kinds of lawsuits.
With many Employment Practices Liability Insurance carriers, we have the tools to find you and your business the coverage as well as the price to give you protection.
Employment Practices Liability Insurance is a coverage that we think businesses should purchase if they have employees – and the more you have means you need this more as the odds go up of a claim.
