Employment Practices Liability Insurance

| Business Insurance, Insurance education, Risk Management.

Business owners have plenty to worry about in this economy, especially just keeping the doors open.   Employment practices liability insurance, or EPLI, can eliminate the worry of an employee lawsuit related to hiring, firing or sexual harrassment.

Types of Employment Lawsuits

In every State, employees are granted certain rights and have expectations of their employers.  For instance, an employee has the right to work in an environment free discrimination and harrassment (i.e. sexual harrassment).   Empoyees expect that will not be fired or passed over for promotions based on gender, ethnicity or religion.  Unfortunately, employers sometimes make mistakes in hiring, firing, promoting workplace equality and ensuring an environment free of harrassment or discrimination.     Employees can and will make claims of discrimination (based on age, sex, race, religion, color and national origin), sexual harassment, wrongful termination, infliction of emotional distress or stress and breach of contract, among others.

Preventing Employement Related Lawsuits

Employers should carefully evaluate their employee manual and make certain the policies and procedures are fully compliant with State and Federal law.   The employer should also ensure they are following the written procedures with exactness.   Discipline should be consistent, fair and documented.   There should be no appearance of favoratism or unequal treatment, even in the smallest business.  Complaints from employees should be take seriously, handled quickly and well documented.  Taking these steps might prevent an employee from suing and also provides a defense in the event a lawsuit occurs.

Benefits Provided by EPLI Coverage

Should a business be sued by a former, prospective or current employee, EPLI coverage will pay for the cost of defense including attorney fees and court costs, regardless of the outcome of the case.  The policy will also pay for any judgements awarded against the business or a settlement reached.   Criminal violations or charges brought against the business owner, corporate officers or other employees are NOT covered.   Punitive damages, fines and other civil penalties may also not be covered, depending on the policy verbiage.

The Cost of EPLI Insurance

In Nevada, EPLI coverage is very reasonable, but prices do vary by State or Region.  Many small business policies (BOP’s) include a base amount of EPLI, such as $10,000, with higher limits available.   Some company’s may need to purchase a stand-alone EPLI policy, with pricing generally starting around $750 per year for $1,000,000 of coverage.   The number of employees, coverage limit, type of industry and location are the major factors in pricing EPLI insurance.

At Safeguard Insurance we can provide you EPLI quotes from several “A” rated insurance carriers and explain the pro’s and con’s of each quote.  Please contact us today for no-cost proposal.