Employment Practices Liability
EPLI covers businesses against claims by workers that their legal rights
as employees of the company have been violated.
The number of lawsuits filed by employees against their employers has been
rising. While most suits are filed against large corporations, no company
is immune to such lawsuits. Recognizing that smaller companies now need
this kind of protection, some insurers provide this coverage as an endorsement
to their Businessowners Policy (BOP). An endorsement changes the terms
and conditions of the policy. Other companies offer EPLI as a stand-alone
coverage.
EPLI provides protection against many kinds of employee lawsuits, including
claims of:
- Sexual harassment
- Discrimination
- Wrongful termination
- Breach of employment contract
- Negligent evaluation
- Failure to employ or promote
- Wrongful discipline
- Deprivation of career opportunity
- Wrongful infliction of emotional distress
- Mismanagement of employee benefit plans
The cost of EPLI coverage depends
on your type of business, the number of employees you have and various
risk factors such as whether your
company has been sued over employment practices in the past. The policies
will
reimburse your company against the costs of defending a lawsuit in
court and for judgments and settlements. The policy covers legal costs,
whether
your company wins or loses the suit. Policies also typically do not
pay for punitive damages or civil or criminal fines. Liabilities covered
by
other insurance policies such as workers compensation are excluded
from EPLI policies.
To prevent employee lawsuits, educate your managers and employees so
that you minimize problems in the first place:
- Create effective hiring and screening programs to avoid discrimination in hiring.
- Post corporate policies throughout the workplace and place them in employee handbooks so policies are clear to everyone.
- Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor.
- Make sure supervisors know where the company stands on what behaviors are not permissible.
- Document everything that occurs and the steps your company is taking
to prevent and solve employee disputes.
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