An Overview of EPLI and What It Can Cover

Recent statistics reveal that 57% of corporate directors do not understand their organization’s labor policies because they have not researched them enough. Further, 40% of American workers say they have experienced or seen discrimination in the workplace.

If you worry about the cost of lawsuits, especially from employees, you must get EPLI insurance coverage. While the cost of having many different business insurance premiums can add up, you must ensure that you have proper protection.

Otherwise, you are leaving your company at risk, which can be even more expensive in the long run–especially if an employee files a lawsuit against you.

What Is EPLI Insurance?

EPLI, or employment practices liability insurance, covers a business from worker claims. Such claims are ones where an employee says their legal rights were violated.

Small business owners may believe they don’t need EPLI insurance coverage until their business grows, but this is not true. While employees file many lawsuits against a large corporation, it does not prevent a small business employee from making a claim.

Some insurers will provide EPLI as part of their Businessowners Policy (BOP) endorsement. Having an endorsement of your business coverage changes the policy’s terms and conditions. However, insurance companies also offer EPLI coverage as a standalone option.

Why Does Your Business Need it?

There are many potential reasons an employee will file a lawsuit. This includes the following claims that can affect your business:

  • Breaching contracts with employees
  • Delivering an evaluation with negligence
  • Depriving employees of career opportunities
  • Discrimination
  • Failing to offer promotions
  • Not managing employee benefit plans appropriately
  • Sexual harassment
  • Wrongful discipline or termination
  • Wrongly inflicting emotional distress

It is a worthwhile investment to make to safeguard you as an employer. Since 1997, over 1.8 million complaints against employers have been filed with the EEOC.

The most common claim is retaliation, making up approximately 56% of all claims. Employers paid about $484 million in settlements in 2021 to discrimination victims.

An insurer’s rate for EPLI depends on how many employees you have, the type of business, and various risk factors. The insurer will consider whether you have had a previous employment practice lawsuit.

What Does it Cover?

EPLI coverage reimburses an employer for defending an employee lawsuit in court. It also compensates for judgments and settlements. Whether your business wins or loses your case, it will cover the legal costs.

Usually, it will not cover civil or criminal fines. It will also not often cover punitive damages. If another policy covers liability, like workers’ compensation, for example, such claims are not covered by EPLI.

Ask About EPLI Insurance Coverage

It’s not just for large corporations. EPLI provides brilliant coverage for small business owners. You never know how much an employee could file suit for and if they can win their case.

Protect your business and its finances. Oliver L. E. Soden Agency can help.

Every organization has unique needs. That is why our agents take a consultative approach, determining your risks and examining your current policies. Get the protection you need based on your industry, size, and critical factors.

Contact Oliver L. E. Soden Agency and request a quote today.