Employment Practices Liability
Driven by an explosion of employment related lawsuits, employment practices liability (EPLI) coverage is a growing segment of the insurance industry. Recent legislative and legal changes have provided significant incentives for employees to file employment-related claims, and employers now possess an increased awareness of employment exposures and are receptive to coverage recommendations that offer greater risk protection.
Over the last several years, litigation related to employee complaints alleging discrimination, harassment and wrongful termination has increased dramatically. These suits can be costly-hundreds of thousands, even millions of dollars. Even an employment related claim without merit can cost an employer $10,000 – $20,000 to defend.
EPLI coverage typically provides coverage for employment claims from the following areas:
- Wrongful employment (hiring or termination)
- Sexual harassment
- Failure to Promote
EPLI coverage is typically written on a claims-made basis.
The exposures presented by employers vary considerably. In selecting and pricing professional risks, underwriters look at a variety of factors. These include the obvious ones, such as the number of employees and the location of the risk. Other factors include the industry, employment practices, loss experience and operating characteristics.
Because of these variables, EPLI policies come in a wide range of types and are offered by a number of different insurers. Often, the best price, coverage and service option may be provided by a smaller specialty insurer rather than a well-known multi-lines insurer.
This information is designed for general informational and descriptive purposes only. The precise wording of each coverage is subject to specific conditions and endorsements of the actual policy issued. Always read your policy very carefully!