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Employment Practices Liability Insurance

Employer Practices Liability Insurance is a type of liability insurance covering claims made by workers who are suing the company for violating their legal rights as employees.

It provides a protection for the employer in the event of claims made by employees, former employees or possibly future employees.

Do you need Employment Practices Liability Insurance (EPLI)?

If your an Oregon business that has employees there’s always the risk of claims. This insurance would cover your business against claims by workers that their legal rights as employees of the company have been violated. All it takes is one disgruntled worker that can put your business at risk if they bring a lawsuit against your business, regardless of the outcome.

This coverage provides protection against many kinds of employee lawsuits, including claims of:

Sexual harassment
Discrimination
Wrongful termination
Breach of employment contract
Negligent evaluation
Failure to employ or promote
Wrongful discipline
Deprivation of career opportunity
Wrongful infliction of emotional distress
Mismanagement of employee benefit plans

A few facts for you to consider of why this coverage is important for your business:

3 out of 5 employers are sued by former employees every year.
Over 40% of Employer Practices Liability claims are against firms with fewer than 100 employees.

The Equal Employment Opportunity Commission (EEOC) recorded nearly 76,000 charges in 2006 and obtained more than $274 million in settlements for claimants.
The medium cost fo an EEOC lawsuit in 2006 exceeded $200,000.
Gender discrimination, age discrimination and retaliation claims are on the rise and there are more women and “baby boomer” in the workplace than ever before.

Your General Liability Insurance does not provide any protection and cover the exposures that are covered within an Employer Practices Liability policy. 

Employment Practices Liability Insurance Costs

Employment Practices Liability Insurance costs are based on a number of factors which include:

  • Financial strength of business
  • Number of employees
  • Are internal dispute resolution procedures in place?
  • Are handbooks given to new employees?
  • Does the employee handbook in place which clearly define the following:
    • Employment At Will contract and not Guaranteed Employment
    • What constitutes sexual harassment
    • Procedures to follow to file an EPL complaint
    • Has management been educated on company procedures with respect to:
      • Hiring/Firing
      • Promotion/Demotion  
  • Limits of coverage
  • Deductible options
  • Loss history

Reach out to me if you’re considering Employment Practices Liability Insurance. I will discuss with you how it works and assess if it fits into your risk management needs. If you determine this coverage is needed I will then provide you with comparative Employment Practices Liability Insurance quotes from multiple insurance carriers so you can get the best possible rate.

As an insurance broker I help businesses throughout Oregon and the Pacific Northwest manage risk.