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).
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
(To learn more about employment laws, visit the Equal Opportunity Employment Commission’s website.)
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.
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.
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.