What is Third Party Employment Practices Liability Insurance (EPLI)?
Business owners are faced with a wide variety of unforeseen circumstances that create risk. Most try to insulate themselves in some way by securing different types of insurance policies. General liability insurance covers accidents and damage to personal property, workers comp covers the employees, and property insurance takes care of the building.
Employment Practices Liability Insurance (EPLI)
Business owners, however, are also faced with the possibility of lawsuits under a variety of other circumstances. The above mentioned policies do not cover this increasing set of risks. Instead, an EPLI policy is necessary to deal with claims related to:
- Sexual harassment
- Wrongful termination
- Contractual disputes
- Age or gender discrimination
- Unfair work practices
While a rigorously-followed human resources policy is the best proactive solution to employee lawsuits, an EPLI is a second line of defense and is specifically written to protect a business owner, whether the case has merits or is frivolous. In every case, it provides a robust defense (and reimbursement of liability) against most harassment and discrimination suits.
The Cost of an EPLI
The cost of an EPLI should be seen as another necessary business expense. Premiums will vary by the type of business, the number of employees and the past record of the business. Of course, coverage begins on the date selected but, in many instances, will also cover a set period of time before the initiation of coverage.
The cost of NOT having an EPLI policy is potentially far greater. It is simple reality in business that as a company grows more successful, it becomes a bigger target. Unscrupulous people, including employees, may take advantage of unfortunate situations or even manufacture one for their own ends. A business with no EPLI coverage may be placed in the dangerous and expensive position of having to settle a frivolous or falsified case.
On the other hand, the better course is to mount a spirited defense in every instance and protect your business from unfortunate circumstances. In short, the risk of harassment and discrimination lawsuits, legitimate or not, require that business owners be prepared and protected. Contact us for information about how to best protect your business.