Employment Practices Liability Insurance

What is Employment Practices Liability Insurance (EPL or EPLI):

EPLI protects an employer from an employees’ or potential employees' claim alleging discrimination, wrongful termination or harassment (including sexual harassment), retaliation, failure to promote, deprivation of a career opportunity, and negligent evaluation. Whether you are a startup interviewing your first employee, or a seasoned corporation with 50+ employees, this is one coverage you should not go without.

What does EPLI Cost:

The cost of EPLI depends on a variety of factors, such as the number of people you employ, if you've had prior suits filed against the company, the percentage of employee turnover, and if you have established rules and practices in place. In many cases, EPLI can endorsed to your existing Business Owner's Policy (BOP), or your General Liability Policy (GL). Based on the business, and sometimes claims history, it may be better to obtain a standalone policy. It's a very affordable coverage, and rare that a business denies the coverage once they understand what is at risk.

What to do to next:

First, call your agent to make sure you have EPLI coverage. Be sure to discuss varying limits of coverage, and weigh the pros and cons of a high vs low deductible.

Next, you can lower your employment practices liability risk, by implementing the following:

Develop a handbook detailing your company's employment policies and procedures for disciplining or terminating an employee. Make sure all employees read the handbook and sign a statement to that effect.
Create a job description for each position that clearly defines expectations of skills and performance.
Conduct periodic performance reviews of employees and carefully note the results in the employee's file.
Develop a screening and hiring program to weed out unsuitable candidates on paper before calling them to interview in person.
Conduct background checks on all possible candidates and avoid hiring workers with a history of alcohol or substance abuse.
Institute a zero tolerance policy regarding discrimination, substance abuse and any form of harassment. Make sure you have an "open door" policy in which employees can report infractions without fear of retribution.
Create an effective record-keeping system to document employee issues as they arise, and what the company did to resolve those issues.

Bottom Line:

EPLI is a necessary coverage for any start up, small business, or existing company with employees (or potential employees).

If you would like to get started with a quote for EPLI coverage or would like to have someone look at your current policy, give us a call at 615.866.2728 and we would be happy to help!

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