Employment Practices Liability

Employment Practices Liability is written to protect employers from allegations of wrong-doing to both employees, and may be extended to include similar claims from Third Parties (non-employees).

Some of the alleged wrongdoings are Wrongful Termination; Failure to Promote; Sexual Harassment; Discrimination, etc. the list goes on and on.

This coverage can also provide some relief against regulatory reviews of allegations of wrongdoing that are enforced by the Equal Employment Opportunity Commission, the Civil rights Act, Americans with Disabilities Act, Age discrimination Act and/or the Family and Medical Leave Act.

Large Corporations with extensive legal representation or comprehensive insurance company policies covering employment practices and procedures may not need Employment Practices Liability insurance (aka: EPL) however, small businesses often find that the cost associated with this type of legal representation can be difficult or too costly to obtain.

Any company that needs to hire, interview or terminate an employee is susceptible to employment practices lawsuits. In addition, companies that have outside sales and marketing personnel are also at risk for some of the same types of allegations against them, from their vendors or other third parties, that employees may claim (discrimination, sexual harassment, etc).

These extremely expensive and time consuming lawsuits can seriously damage a company, its bottom line and its reputation.

A company should review its loss exposure related to employment practices in order to fully realize the value of purchasing insurance coverage that will properly protect its assets. Some factors to consider when deciding what level of insurance your company may need include the number of people your company currently employs, employee turnover rate and the types of protection your company currently has in place.

In addition to purchasing the proper levels of insurance, a company can mitigate its losses by developing a detailed employee handbook explaining the employment policies and procedures. Current employees and new hires should then read and sign that they have received, read and agree to abide by the Handbook. Have a detailed job description for each and every position which clearly defines the expectations required. Keep an official record of each employee’s performance by conducting regular in-house reviews, having them witnessed and signed. Conduct background checks on all prospective new employees and try to develop a process to decrease or eliminate potential liabilities.

Some common insurances coverages included in a standard Employment Practices Liability Insurance policy are:

1. Wrongful termination, including allegations of breach of employment contract
2. Harassment, such as work place bullying, sexual harassment or hostile work environment.
3. Discrimination, such as but not limited to, age, gender, gender identity, race, national origin, religion, sexual orientation, pregnancy, military status, or disability.
4. Retaliation
5. Employment-related misrepresentations
6. Employment-related libel, slander, humiliation, defamation, or invasion of privacy
7. False arrest or imprisonment
8. Wrongful failure to employ or promote
9. Wrongful discipline
10. Failure to grant tenure
11. Negligent hiring, retention, training, supervision, infliction of emotional distress or mental anguish, failure to provide or enforce adequate or consistent corporate policies and procedures, or violation of an individual’s civil rights.