What Is Employment Practices Liability Insurance?

Employment practices liability is a type of business insurance coverage that may help pay for legal costs if your business is sued by an employee or contractor. EPLI may help protect your business against the following types of lawsuits:
·       Discrimination
·       Sexual harassment
·       Retaliation
·       Wrongful termination
·       Deprivation of a career opportunity

EPLI may be sold as a coverage that you can add on to your existing business owners policy, or it may be sold as a standalone policy. Check with your insurer to see which option is available for your business.

WHO IS COVERED UNDER EPLI?
According to the American Bar Association, EPLI typically covers claims brought against your business' management personnel (and sometimes other employees).
Lawsuits against your business brought by the following groups may be covered:
·       Employees
·       Former employees
·       Employment candidates
·       Temporary employees
·       Leased employees
·       Independent contractors
·       Customers
·       Vendors
 
WHAT ISN'T COVERED UNDER EPLI?
Employment practices liability insurance does not protect you or your business against intentional or dishonest acts. Additionally, employee claims involving bodily injury or property damage typically aren't covered, according to the International Risk Management Institute (IRMI). Those types of claims would usually fall under your business' general liability coverage.

HELP PREVENT EMPLOYEE LAWSUITS
As a business owner, it's important that you make sure to follow all the legal guidelines surrounding employment practices. The U.S. Equal Employment Opportunity Commission offers tips, FAQs and resources for small business owners at its small business resource center so you can understand your responsibilities when it comes to employment discrimination laws.

Purchasing employment practices liability insurance (EPLI) is also a smart way to help protect yourself financially in case of unforeseen circumstances. Talk to an experienced business insurance agent to better understand the coverage options for your business.