Yes. If you have a business that has employees, yes. As for what EPLI is, that would mean Employment Practices Liability Insurance. This could be a short blog; I gave you two short answers. But you probably have a few more questions now. I don’t blame you.
What is EPLI?
Employment practices liability insurance protects your business for claim related to things such as:
- Discrimination
- Age Discrimination
- Harassment
- Sexual harassment
- Wrongful termination
- Wrongful failure to promote
- Wrongful discipline
- Violation of the Family and Medical Leave Act
- Retaliation
The reason for this coverage is that the legal cost for an employment-related claim can be quite expensive, and we live in a rather litigious society. So, you could be on the hook for a settlement as well as legal costs. Even if you, the business owner isn’t in the wrong. Both of which (settlements and legal costs) are covered under EPLI.
Typically, an EPLI is an endorsement on a business owners policy, or it can be purchased as a stand-alone policy if your policy does not offer that option. It is very important to remember that your employees aren’t the only ones that can accuse your organization of harassment or discrimination. In fact, customers, vendors, or other people invited to your business could sue you just as well. An EPLI policy with third-party coverage is ideal to insulate you from potential lawsuits.
But there are also complaints about wage or hour violations such as wage calculation, overtime calculation, or job classifications. Issues centered around these violations would typically be covered if your policy also offers wage and hour defense costs.
As you can see, EPLI just isn’t as simple as just purchasing an endorsement to a policy. There are layers to the coverage. You should discuss these facets of your business with your insurance advisor to make sure that you are protecting yourself in the event of a complaint.
How do I purchase EPLI?
As we mentioned before, you can always check with your insurance agent to confirm if an EPLI endorsement is available or if you can purchase a stand-alone policy. As you can see, the coverage of an EPLI policy isn’t exactly simple. And neither is purchasing it. If fact, you will need to meet a few criteria before you can get a policy or endorsement.
You’ll need to provide the following to secure the coverage and calculate the premium associated with an EPLI endorsement or policy.
Employee audit – your carrier will want to know the number of full-time and part-time employees and quite possibly any contract employees you have on staff.
Payroll – you will need to provide the payroll numbers for your full-time and part-time employees
Past complaints – have you had any past complaints regarding things such as discrimination, harassment etc?
Employee handbook – this will be extremely important since it should speak to several other questions such as your company’s policy as it relates to items such as discrimination and harassment. But not only the company’s position on them, but the internal process as to how our HR department (or you) handle these complaints.
Keep in mind that EPLI doesn’t replace solid employment practices. Most insurance companies won’t insure your company unless you can demonstrate some rudimentary employment practices. This includes things like handbooks and post-incident practices. It would be worth your time to discuss these with an HR Consultant. There are many great online resources now that can help you affordably address these items.
This topic does have some complexity to it and we are always here to help you navigate this risk for you and your organization. Please feel free to call us any time at 513-444-2100 or book a time here: https://bit.ly/3AQoEMp
