Hiring and firing decisions are some of the most difficult ones a manager or business owner makes.
And occasionally, liability factors into such staffing issues. But fortunately, there’s a product that covers you on that front: employment practices liability insurance (EPLI).
What Does EPLI Protect Against?
EPLI protects your business from hiring to firing and virtually every employment-related issue in between. The coverage can even provide protection before an employee is hired. For example, individuals have claimed discrimination during the hiring process after they were not selected for a job they felt they were qualified for.
Aside from the wrongful refusal to employ a qualified applicant, these are some other common claims scenarios that an EPLI policy covers: Wrongful failure to promote, wrongful deprivation of career opportunity, or employment related misrepresentation
- Wrongful demotion, evaluation, reassignment or discipline
- Wrongful termination, including retaliatory or constructive discharge
- Unlawful work-related harassment, coercion, discrimination or humiliation as a consequence of race, color, creed, national origin, marital status, medical condition, gender, age, physical appearance, physical and/or mental impairments, pregnancy, sexual orientation or sexual preference or any other protected class or characteristic established by any applicable federal, state or local statute
- Slander, defamation or libel through oral or written publication, or violation or invasion of a right of privacy
(To learn more about employment laws, visit the Equal Opportunity Employment Commission’s website.)
Who Can Make an EPLI Claim?
It doesn’t need to be an owner or a partner of a business acting unprofessionally, just as the harassment doesn’t need to happen to an employee. Claims can result from employee-to-employee or employee-to-third-party harassment.
Aside from applicants or any former, current, leased or temporary workers, an EPLI policy also covers against claims brought forth by clients, customers, independent contractors, and officers who are not owners or partners.
How Much Does EPLI Cost?
As with any insurance policy, premiums are dependent upon several factors and pricing should be tailored based on the risks of the business being insured. A few key determining factors that could affect your premium are: more employees; an active history of EPLI claims; higher limits of coverage; and lower deductible.
Stay Up to Date on Employment Best Practices
While an EPLI policy can ultimately shield you from any direct costs, the time and frustration that can mount from a legal battle isn’t something the owner of any business wants to face. Your best defense begins with knowledge.