What is Employment Practices Liability Insurance?
If you are a business owner, manager, or involved in the hiring, termination, or evaluation of employees, there’s a chance you may be sued by a current, former, or prospective employee at one point or another. You may not have considered it, but from the moment you first interview a candidate for employment, you’re putting yourself and your business at risk.
Employment practices liability (EPL) insurance can protect you from being held financially and legally responsible should an employee file a lawsuit or make an allegation against you.
Examples of Potential Lawsuits or Allegations
A prospective, current, or former employee may make a case against you or your business for any of the following:
- Discrimination (race, gender, religion, disability, age, pregnancy etc…)
- Wrongful termination
- Sexual harassment
- Wage/hour law violations
- Illegal background checks
- Invasion of privacy
- Failure to employ or promote
- Negligent evaluation
- Emotional distress
- Breach of contract
Though you should hope to never need it, EPL insurance can help protect you and your business against employee suits related to the above and more.
Why You Should Invest in Employment Practices Liability Insurance
Lawsuits—whether they make it to trial or not—can be expensive, time consuming, and distracting for all involved. Additionally, they can lead to a loss of employee morale and productivity. That being said, EPL insurance only costs a fraction of what you would end up paying in court costs and other damages.
The actual cost of EPL insurance will depend on a number of factors, including:
- The type of business/industry
- The size of your business
- Whether you have been sued before
- The amount of coverage you need
- Whether you have anti-discrimination/harassment policies in place
The law is designed to protect employees. EPL insurance is designed to protect you and to ensure that both employers and employees are treated fairly.
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