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Employment Practices Liability Insurance provides coverage for you against claims made by current, former and potential employees. It covers all types of discrimination (age, sex, race, disability, etc.), wrongful termination of employment, sexual harassment, and other human resources types of claims. You, your Directors and Officers and your company are protected by EPL. New and fast growing companies are often prey to these types of claims because they don’t have an HR department and have not established HR policies and procedures.

Three out of five firms will most likely be sued by an employee. Companies are vulnerable from pre-hiring through the exit interview, even if the worker was never hired, or there for only a short time. A claim could result from something very minor- a joke in bad taste told at lunch, a flirtatious salesman, or that individual who felt you did not treat them properly. Even if the claim has no merit, your legal expenses could be substantial.

Possible Areas of Liability:

  • Sexual harassment
  • Wrongful Termination
  • Discrimination
  • Statute Violation
  • Negligent Hiring
  • Negligent Supervision
  • Negligent Promotion
  • Negligent Retention
  • Disabilities
  • Breach of Contract
  • Loss of Consortium
  • Emotional Distress
  • Invasion of Privacy
  • Drug Testing
  • Mental Anguish
  • Libel
  • Slander
  • Negligent Evaluations

Claims Covered. All EPLI policies cover civil judicial proceedings and most cover arbitration. However, some also cover claims before litigation. Check your policy carefully.

Person Bringing Covered Claim. All EPLI policies cover claims brought by current full-time employees. It is recommended you get coverage for current part-time employees as well as for applicants and former employees.

Wrongful Acts Covered. Almost every EPLI policy covers claims of wrongful termination of employment, workplace harassment and discrimination. Many offer a more comprehensive list of covered acts, including negligent hiring/supervision/evaluations, invasion of privacy, defamation and intentional infliction of emotional distress.

Practices or Acts Excluded includes any claims related to the Fair Labor Standards Acts, the National Labor Relations Act, the Worker Adjustment and Retraining Notification Act, and arising from downsizing, layoffs, plant closures or strikes; COBRA; the Employee Retirement Income Security Act; OSHA; and the costs associated with complying with the Americans with Disabilities Act. Most criminal acts are also not covered, so be sure to have a commercial crime policy as well.

Attorney Choice: If you have has a strong preference for a particular defense counsel, name that attorney in an endorsement to the policy. Otherwise, the carrier will select counsel from a list of panel counsel.

Be sure to consult with your Strategic Insurance Solutions, Inc. advisor to be sure you get the correct coverage for your business.

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