1. Employment Practices Liability Insurance Protects Businesses From Common Claims.
EPLI protects companies against claims that past, current and prospective employees of the company bring against the company, its directors and officers, and its other employees. Common employment practices violations include discrimination (based on sex, age, race, religion or other factors); sexual harassment ( including “quid pro quo” harassment claims); wrongful termination; and a variety of other employment-related claims that violate employees’ civil rights or their ability to perform their jobs in an acceptable and fair working environment. These types of claims can be extremely expensive to defend against, even if the court finds in favor of the employer.
What is also common about these types of claims is that they frequently consist of one person’s word against another’s. For example, if a candidate for a job feels that she was passed over due to age discrimination, but the human resources director who interviewed her says it was because another candidate was more qualified, the responsibility to make a judgment frequently rests with a jury who must decide which person they believe more. This type of case can be risky for a company to face, since many potential jurors may bring their own big-business prejudices to the jury.
2. Why Do I Need Employment Practices Liability Insurance?
Employment Practices Liability Insurance Reflects Today’s Business Environment.
Over the past decade, the number of discrimination cases has more than tripled in the United States, and a vast majority of these cases are filed against employers. Employment issues make up 30 percent of all civil litigation in the United States, and charges filed through the Equal Employment Opportunity Commission increase virtually every year. Publicly held companies, privately held companies and non-for-profit organizations are all at risk for being sued by employees and potential employees.
3. What it doesn’t cover
Most, if not all, EPLI policies have a list of exclusions specifying what the policies won’t cover. These usually include risks covered by other types of policies. For example, most EPLI policies don’t offer coverage for bodily injury or property damage because these claims are covered by commercial general liability policies.
Other policy exclusions include bans on coverage for intentional conduct, such as assault or battery or criminal conduct. EPLI policies also frequently exclude coverage for punitive damages and fines or penalties.
4.Recent big awards such as $5 billion claim in an employment suit against Microsoft and a $192 million settlement in a case against Coco Cola have caused trial lawyers to swarm to these types of cases, clogging court dockets with a legion of employment cases. Many insurers now say that they’re losing money on EPLI policies and are seeking to remedy this situation. The insurers are lowering policy limits, jacking up premiums and have implemented a more stringent underwriting process to stem their losses.
5.EPLI is just one piece of the insurance puzzle intended to protect your business from liabilities it faces every day. This coverage can be highly customized, and should be one part of a larger insurance strategy to protect your business from exposure to risks. Your JKlein representative can help you determine the most appropriate, cost-effective way to address your company’s specific risks and needs.
For more info or free quote please call us at 718-435-4502 xt 101 or email us @ Jklein@jklein.biz