Employment Practices Liability Insurance - Cover your employment-related risks
What is Employment Practices Liability Insurance? • Employment practices liability insurance (EPLI) is a type of professional liability insurance for employers. • This policy protects employers against claims made by employees based on: -Discrimination -Wrongful termination -Sexual harassment -Retaliation -Workplace harassment -Breach of contract
What are the coverages of Employment Practices Liability Insurance?
EPLI covers losses related to the following cases against employers: • Discrimination • Retaliation • Wrongful termination • Sexual harassment • Workplace harassment • Breach of contract • Defamation cases • Negligent HR decisions • Negligent supervision or appraisal processes Additionally, EPLI covers defense costs for employers in case of lawsuits.
Type of Coverage • EPLI is usually written on a claim-made basis. • The policy only pays for the claims made in the coverage period. • If an incident happened in the coverage period, but the claim request was made later, the policy will not cover the losses. • A tail policy will cover the additional losses after the coverage period. • Tail coverage is liability insurance that extends beyond the time of the primary coverage.
Consent-to-settle and Hammer Clause • When there is a consent-to-settle clause, the carrier needs your consent to settle claims. • Hammer clause comes in effect if you do not want settlement by the insurer. Your carrier will give you a fixed amount of money to cover your losses.
Standard Exclusions of EPLI • Bodily injury (BI) • Property damage • Penalties and fines • Criminal activities • Contractual liability • Punitive damages • Strikes or lockouts • Violation of laws
Common Endorsement to EPLI • Third-party coverage : It is coverage against the laws suits of discrimination filed by third-parties such as customers or suppliers. • If your employees face the customers directly, this coverage is important.
Factors that determine the cost of employment practices liability insurance
• Number of employees • History of lawsuits or employment issues of the employer • Employee turnover rate
Some common employment related lawsuits
• Medical marijuana use: The New York City Council passed a law that will stop employers from testing medical marijuana. • Sexual harassment lawsuits: The rise of the ‘metoo movement’ is bringing up more chances of sexual harassment charges. • Whistle–blower claims: Whistle–blower claims filed by employees have resulted in more than $1 billion losses to employers. • Website accessibility lawsuits: If websites are not accessible to specially-abled people, it is a violation of the law in some states. Therefore, these lawsuits are also on the rise.