Employees' lawsuits against employers are increasing. Liability insurance (EPLI) is a cover to protect your company against employees' claims that their rights have been violated. Some insurers will provide this coverage as a business owner policy (BOP), while others offer it as stand-alone insurance.
What does EPLI cover?
Liability insurance for employment proceedings provides protection against a number of employment claims, including:
- Wrongful dismissal
- Sexual harassment
- Misuse of employee benefits
- Misciplinary discipline
- Breach of Employment Contract
It may help you to cover your legal costs and any settlements or judgments arising from such a claim. Common exceptions include third party property damage or bodily injury, work-related employee illness or injury, wage and hourly claims and intentional or dishonest acts. EPLI coverage usually does not pay for punitive damages (intended to punish the defendant for crimes) or for civil or criminal fines.
What Is a Claims-Made Basis?
This type of coverage is usually written on the claim, which means that the incident that led to the claim and notification of the claim must have occurred during the coverage period. Employment practices often arise months or years after an alleged incident has occurred. If your insurance was no longer valid when a claim was made, your business would not be covered.
When would my company need liability insurance?
A company of all sizes risks being forced by employees. The risk increases when you hire more employees and managers. Interviewing a prospective employee is also a risk, as that person may claim discrimination.
We live in a legal society. Defending your business against a hiring process can cost many thousands of dollars, in addition to the cost of any awards or deals.
How can I help prevent employment rights?
The best preventive approach is to train managers and employees so that problems do not arise in the first place. You will need effective employment and screening programs to avoid discrimination, and company policies are published throughout the workplace and placed in employee handbooks. Educate employees on what measures to take in the event of harassment or discrimination by a supervisor and ensure that supervisors are aware of the company's policy.
How much does EPLI cost?
Annual premiums for liability insurance can vary widely depending on a number of factors, including:
- Number of employees
- Coverage amount
- Deductible or self-insured balance (amount for which the policyholder is responsible)
- Turnover rate for employees  Employment and Dismissal Practices
- Claims History
According to Fit Small Business EPLI premiums for a company with one to ten employees, with coverage amounts of $ 500,000 per event and a total of $ 1 million and one Deductible $ 2,500 (or self-insured balance) ranges from $ 800 to $ 2,000 annually. You can lower your premiums by increasing your self-insured balance or deductible amount, but it also means that you will cover more costs in the event of a lawsuit.
Our agent can evaluate your company's liability insurance needs and help you find the right coverage at the best available rates.