EPLI

Employment Practices liability Insurance

Risk management of the hiring, managing and termination of employees has become a major risk for companies over the last decade. Employment Practices Liability Insurance (EPLI) covers companies against claims and lawsuits related to a broad spectrum of employment related claims by current employees, former employees and candidates. The EPLI coverage offers a company indemnification against the legal defense and settlement cost associated with an employment –related claim. The range of exposures that companies face stemming from wrongful acts real or perceived include: wrongful termination, discrimination, sexual harassment, retaliation and often times expand into areas defamation, invasion of privacy, and areas involving evaluations and promotions. Companies need to constantly self-access their hiring, management, and termination polices and the strengths and weaknesses of their corporate culture. Different industries have more inherent exposures to hiring practices for their labor force and companies need to have strong HR departments within to maintain a balance with their work force. The need for a company to consider a comprehensive EPLI policy arise from the practical reality that the legal and court system have seen a 400% rise in employee lawsuits in the last 20 years with out of court settlements now as high as $75,000 and average jury awards above $200,000. In many cases, the legal fees and settlements can run into the millions of dollars.

Employment lawsuits can be more than just the price of doing business and the necessity of having employees. Lawsuits that occur between a company and their employees are expensive and can have major impact on productivity and morale and even affect the long term arc of a company’s hiring practices. As employee lawsuits become more common place in the work force, the financial benefits of a well-crafted EPLI policy to a company have become a reality in today’s businesses risk portfolio.