Employment Practices Liability Insurance

What is Employment Practices Liability Insurance?

Businesses that have employees must adhere to a number of federal and state laws. Should they violate any of these laws, they may be held responsible by any affected employees. Employment practices liability insurance helps protect businesses from covered claims and suits that arise from covered employment infractions.

Employment practices liability insurance is a specialized form of liability coverage. Policies are uniquely designed to help protect against the risks that employing people presents, frequently offering protection against a variety of employment-related claims and suits.

What Sorts of Incidents Are Covered by Employment Practices Liability Policies?

Employment practices liability policies generally offer coverage for all aspects of employment, including everything from interviewing prospective applicants to letting employees go.

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Employment Practices Liability Insurance

Depending on its terms, conditions, exclusions and coverages, a policy might offer protection in the following scenarios:

  • A woman wasn’t offered a job because she was six months pregnant during her interview
  • Job applicants weren’t informed that background checks would be run on them
  • Similarly qualified men and women were paid drastically different salaries
  • Interns should have been paid for the work they did and weren’t
  • An elderly employee was let go because of their age

(As is the case with any form of insurance, the exact protections afforded by EPLI vary from policy to policy. Business owners should read through a policy’s paperwork carefully before purchasing coverage, so they understand precisely what protections their business have.)

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What Businesses Can Benefit from Having EPLI Coverage?

Any business or nonprofit organization that has employees may be sued by their employees and, therefore, may benefit from obtaining EPLI coverage. After all, few businesses and nonprofits could afford the legal and possible settlement costs of a potential employment-related lawsuit.

Nonprofits may benefit from having EPLI coverage even if they don’t have official employees. In some cases, volunteers are protected by the same laws as employees. This can expose nonprofits to potential discrimination lawsuits regardless of whether their workers are actually paid. EPLI policies that cover volunteers and employees are offered by several insurers.

When Should Businesses Purchase an Employment Practices Liability Policy?

Because employment practices liability policies frequently offer coverages that apply during the hiring process, businesses are often wise to get an employment practices liability policy before they begin the hiring process. Before businesses place their first help wanted ad, they should contact an insurance agent about employment practices liability coverage.

Employment Practices Liability Insurance

If Businesses Follow All Employment Laws, Do They Still Need Coverage?

Following all employment laws is perhaps the best way to protect a business from potential employment lawsuits, but it’s not perfect. Any employee might file a claim against their employer, and defending a business against a claim can be expensive even if no infraction was committed.

Having employment practices liability coverage can serve as another solid defense against potential employment practices lawsuits. Policies normally offer protection for claims where businesses are innocent and where they’re guilty, as long as the circumstances of a claim meet a policy’s terms and conditions.

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How Can Businesses Get Quotes for Employment Practices Liability Insurance?

Employment practices liability insurance policies can be complex policies, and comparing their protections is often an involved process. For help obtaining and reviewing quotes for employment practices liability policies, business owners should contact an independent insurance agent who specializes in commercial insurance. An independent agent will be able to request quotes from different insurers, and they’ll have the expertise necessary to accurately compare different policies. With an agent's abilities and expertise, finding a good policy becomes easy. 

Meet Your Industry Specialist

Jeff Kroeger

Principal, Senior Vice President, and Head of Commercial Lines, Mr. Kroeger also manages the company's hospitality book of business and is that unit's primary producer. He is a graduate of Montclair State University and was named a 2015 Young Gun Insurance Business America.

Jeff has been providing exceptional insurance for restaurants, bars, nightclubs, and more for many years. He understands the unique challenges this industry faces and delivers the right coverage at an affordable price.

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