Employment Practices Liability Insurance (EPLI) is specialized coverage designed to reimburse a business for monetary loss incurred in litigating and settling wrongful employment liability claims. Many businesses I have spoken to have never heard of it.
With employment litigation on the rise, EPLI is a sensible and necessary layer of protection for a business.
EPLI is invaluable if a current or past employee files an accusation, claim, or lawsuit against a company for things such as discrimination, harassment, wrongful termination, libel, slander, humiliation, and more.
Most commonly designed as gap insurance, EPLI can be important since most general business liability insurance policies do not cover employment-related litigation, and directors’ and officers’ liability insurance only protects the individual and not the company itself.
Does a business need EPLI? With employment litigation settlements averaging $80,000, they should ask themselves these two questions:
- Can I afford a lawsuit on my own?
- Do I have emergency funds?
It is important for a business to understand the importance of human resources compliance, especially if it plans on considering Employment Practices Liability Insurance.
EPLI is not meant to replace sound and secure employment practices. In fact, most insurance companies will not insure a company unless it has some basic employment practices in place.
Employee handbooks and documented fair employment practices are some of the major items that insurance companies expect an employer to have when applying for an EPLI policy. A business should be prepared for the insurance company to scrutinize all of their HR functions.
Marzano Human Resources Consulting has helped business meet the necessary insurance company standards needed for EPLI approval. We ensure companies have a well-written, compliant employee handbook in place. If a business already has a handbook, we will review it as employment regulations are constantly changing. We will also review your HR practices, such as hiring, firing and promotions, to ensure you pass the scrutiny of any insurance company.