It’s unfortunate that discrimination, harassment, and wrongful termination claims are routinely made against companies large and small all across California and the nation. Even a single claim can cost a company significant time and money just to defend. Losing a case or paying to settle could cut into profits or even cause a small business to fold.
Every company is at risk for these types of claims, no matter how well you think you know your employees or how well you train them to be sensitive and professional around their co-workers. All it takes if an off-color joke overheard in the break room, an employee looking for vindication after being let go, or a disappointed job candidate who felt they were discriminated against in the hiring process.
A relatively new form of insurance now covers a company for these types of risks.
Employee practices liability insurance (also called employment practices liability insurance) protects a company against claims from employees, previous employees, and job candidates. The most common types of claims the insurance protects against are:
- Discrimination (on the job and during the hiring process)
- Harassment/sexual harassment
- Wrongful termination
- Invasion of privacy
- Emotional distress
- Breach of contract
EPLI may be included (rarely) in a general liability insurance policy, or it can be purchased as an individual insurance product. While every policy is different, EPLI will usually cover the cost of defending against the claims listed above and/or cover a payout to settle the claim or if the case is lost – up to the established limits of the policy, of course.
Personally, at Fusco & Orsini Insurance Services, we think that employee practices liability insurance is a no-brainer. Harassment, discrimination, and wrongful termination lawsuits are extremely common and pose a huge risk for businesses, especially small and medium-sized businesses that may not be able to afford to pay out a large claim, or simply may not be able to afford the cost to defend. You just never know when someone you chose not to hire will claim discrimination or an employee will perceive harassment in the way he or she is treated by another employee. Even if a specific suit has no merit, it will still cost you money to defend.
The cost of EPLI depends on a variety of factors, including the size of the company and the policy limits the client is seeking. To learn more about Employee Practices Liability Insurance (Employer Practices Liability Insurance), give us a call at (858) 384-1506 or contact us through our website. We’d be happy to sit down with you to discuss what EPLI does and does not cover and what type of EPLI policy might be best for your company.