What is Employment Practices Liability Insurance? Employment Practices Liability Insurance (EPLI) — a type of liability insurance covering wrongful acts arising from the employment process. The most frequent types of claims covered under such policies include: wrongful termination, discrimination, sexual harassment, and retaliation. In addition, the policies cover claims from a variety of other types of inappropriate workplace conduct, including (but not limited to) employment-related: defamation, invasion of privacy, failure to promote, deprivation of a career opportunity, and negligent evaluation. The policies cover directors and officers, management personnel, and employees as insureds. The most common exclusions are for bodily injury (BI), property damage (PD), and intentional/dishonest acts. EPLI policies are written on a claims-made basis. The forms contain “shrinking limits” provisions, meaning that insurer payment of defense costs—which are often a substantial part of a claim—reduce the policy’s limits. This approach contrasts with commercial general liability (CGL) policies, in which defense is covered in addition to policy limits. Although EPLI is available as a stand-alone coverage, it is also frequently sold as part of a management liability package policy. In addition to providing directors and officers (D&O) and fiduciary liability insurance, management liability package policies afford the option to cover employment practices liability (EPL).
HOW CAN I MINIMIZE EXPOSURE?
- Distribute an employee handbook.
Develop a code of ethics policy.
- Include an anti-retaliation provision.
- Institute handbook auditing procedures.
- Regular and consistent harassment and discrimination training
- Make sure all employees receive proper training
- Document everything
EVERY COMPANY IS AT RISK
- Even well-run companies with strong employment-related policies and procedures can face allegations of wrongful employment action
- Defending employment-related allegations can cost thousands of Dollars
- According to OSHA: “Workplace violence is any act or threat of physical violence, harassment, intimidation, or other threatening disruptive behavior that occurs at the work site. It ranges from threats and verbal abuse to physical assaults and even homicide. It can affect and involve employees, clients, customers and visitors.”
- Employment related claims can disrupt businesses, hurt employee morale, damage reputations and cost business financially … even before going to court.
If you would like to receive a quote for Employment Practices Liability Insurance please contact your Professional Underwriters, Inc. agent or contact us here.