Just what is Employment Practices Liability Insurance?
In the 1990s employment-related claims and lawsuits increased significantly. To help find coverage for such claims under existing policies, the insurance industry developed employment practices liability insurance (EPLI). This new coverage reduced the number of charges made against employers and that was due to an awareness of employment-related problems and the effort to control them. What does an EPLI policy cover? An EPLI policy covers:
- acts of wrongful termination
- negative evaluation
- discrimination based on factors such as sex, race and religion
These risks are usually preventable through management risk control efforts. Insurance companies offer risk management help. They can train management and employees to prevent poor employment practices. Make sure to compare EPLI policies for inclusion of the employment practices you want covered by insurance. In today’s market, the available EPLI policies vary widely in the covered practices. Here are some of the items probably excluded in an EPLI policy:
- civil or criminal fines
- malicious acts or omissions
- Worker compensation situations, and
- Americans with Disability Act problems
Defense costs may or may not be covered by EPLI. You need to review this as you may find that the policy limit may be reduced by the amount of legal fees paid. Be sure you get a policy that doesn’t do this. EPLI policies are “claims made” policies. So pay careful attention to the extended reporting period allowed for reporting claims. A short or long period can be built into the policy.
A final tip is to be sure to take the highest deductible that you can afford. This will keep your premium down and enable you to purchase the limits you feel safe with.
For more information about an EPLI policy, call us NOW at 1-800-640-4743! You can also request to be contacted online by completing our Contact Form Here. Remember, better employment practices create a better work environment.