What Does EPL Cover?
The inner workings of an EPL policy all focus on what are known as “wrongful acts” in the business world. An adequate policy will cover the most common “wrongful acts,” including:
- Wrongful termination
- Negligent hiring and supervision
- Failure to hire/promote
- Invasion of privacy
EPL covers lawsuits brought on by current employees, but also other possible litigation originators, such as:
- Former employees
- Individuals who interview for a position
- Independent contractors
Do you think your business is safe from legal trouble? Here are just some scenarios I’ve come across in which EPL coverage could have been used.
Interview gone wrong
A business owner is conducting several interviews for a new position. After making their selection, one of the interviewees sues for discrimination, saying that their skills were an exact match for the position and they were turned down for discriminatory reasons.
Discrimination suits aren’t limited to current employees. Potential and former employees can also sue.
A group of friends are planning a weekend trip. The three families book hotel rooms for the same nights and at the same hotel. However, after checking in, the two white families are charged noticeably less than the African American family. Though the discrepancy is blamed on a misinformed employee, the overcharged family sues the hotel for discrimination.
An honest and simple mistake can still offend. Employees that are uninformed about new pricing or policies can cause serious issues.
Overlooking federal laws
A veteran enters a grocery store with his service dog, trained to assist with his PTSD. The manager of the store demands the man and his dog leave as he believes the canine presents a health hazard. The veteran sues for violation of the Americans with Disabilities Act.
Not fully knowing and understanding acts and laws can result in reputation-damaging lawsuits.
An employee hears an off-color joke and sends it off in an email to another coworker. The recipient goes to reply but hits the wrong button and forwards the email to the entire staff. Though an apology is issued, a small group of employees file a suit claiming they work in a hostile environment, using the email as one piece of evidence.
A poor judgement call by an employee can hit your business in the worst way.
A restaurant supplier signs a one-year contract with a restaurant, being promised they will be their sole product provider. However, six months into the year-long agreement the restaurant finds a less expensive provider. They cancel the contract and the supplier sues for Breach of Contract.
It’s not just employees or customers that can sue. If someone is involved with your business in any way, they can bring a lawsuit against you.
The list of potential scenarios if virtually endless. If you’re a business that either hires people or works with people (that’s my professional way of saying everyone), my upcoming EPL coverage series is exactly what you need to become informed and find protection.
Does My Business Need EPL Coverage?
EPL is not legally required in any state. It is a completely optional policy.
But this doesn’t mean it’s not a necessary policy.
One of the most common reasons I hear from business owners who turn down EPL coverage is that they know they’ll never need it because they play by the rules.
But here’s the thing.
It doesn’t matter if you’re the Saint of Business Conduct. While your company is innocent until proven guilty, the stigma alone that a lawsuit could bring against your brand and reputation could be devastating.
At the same time, if you are a walking lawsuit, the cost of either settling or fighting compensation can put you out of business in a New York minute.
If a lawsuit greeted you at your desk in the morning, would you be prepared?