Employment Practices Liability insurance, also known as EPL, or EPLI, provides coverage to employers against claims made my employees or potential employees alleging discrimination, wrongful termination, harassment, invasion of privacy, false imprisonment, breach of contract, emotional distress, wage and hour law violations, and other employment-related issues.
As a business, you are at risk of an employment claim from the moment you interview a prospective employee. By purchasing employment practices liability coverage, businesses may decrease their chance of being a target of a lawsuit. Most insurers will review a company’s employment practices, policies, and procedures that guide hiring, disciplining, and terminating employees, and make recommendations to reduce their risk and exposure before insuring the company.
Understand employment law
A variety or state and federal laws are in place to protect the rights of people you hire or are considering hiring and it’s important to both understand and carefully follow these laws:
- Title VII of the Civil Rights Act of 1964
- The Equal Pau Act of 1963
- The Civil Rights Act of 1966
- The Immigration Reform and Control Act of 1986
- The Americans with Disabilities Act of 1990
- The Bankruptcy Code
- Equal Employment Opportunity Act of 1972
- The Age Discrimination in Employment Act
Employment Practices Liability insurance is typically issued on a claims-made basis. This means a claim will only be covered if the incident in question occurred while your EPL insurance policy was active and that your policy is still in force at the time when the claim is made. Because employment claims often come months or even years after the alleged incident, an employer might be vulnerable if the insurance coverage was canceled. An employer may be able to extend a policy beyond its original end date with tail coverage.
For instance: You cancel a policy upon finishing a contract, and someone submits a claim against your business several months later. In this case, without “tail coverage,” your policy will not cover you even if it was active and in-force at the time the alleged incident occurred.
Call Linda A. Christ Insurance today
The cost of insuring your business for EPL insurance depends on a variety of factors, such as the number of employees, whether you’ve had prior lawsuits against your business, the percentage of employee turnover, and most importantly, if you have established rules and practices in place. The experienced professionals at Linda A. Christ Insurance Agency will help you understand your potential risks and exposures and make sure you and your business are adequately protected. Call today for a complimentary consultation.