What is EPLI Insurance? A Simple Guide to Employment Practices Liability Insurance
What is EPLI Insurance?
EPLI stands for employment practices liability insurance. It is a type of business insurance covering employment-related claims, which means it can financially protect your business against employment-related lawsuits.
For example, after hiring a white applicant, another applicant who is Hispanic sues your company. He claims he is more qualified and was not hired due to racial discrimination. EPLI can protect your company financially during the claim and keep your small business safe from a catastrophic financial blow.
Why Do I Need EPLI Insurance?
As a business owner, you may be asking yourself why EPL insurance is relevant. After all, you manage your business “the right way” and take great care of your employees and company. So why should you care?
Employee claims all involve an existing part of your workplace such as hiring practices or the work environment. Because of this, no small business is immune. Actually, small businesses are particularly susceptible to employee lawsuits because they have fewer protections when compared to larger businesses, which could include a large HR department or airtight operating procedures.
Even if you and your company did absolutely nothing wrong, just taking a case to court can be a disaster in legal fees. There are also mistakes that employees can make because—let’s face it—we’re all human.
Some common employment-related lawsuits include
- Intentional, unintentional, or perceived discrimination in hiring, promoting, or firing practices.
- Privacy issues including invasive surveilling or data breaches of employee information.
- A hostile work environment including mental, emotional, or physical damage
In addition to these examples, we have a more thorough list of real-world scenarios in our article, EPLI — Is Your Business Protected? that could’ve led to a court case like employee errors or bad judgment calls.
I Already Have Business Insurance. How is EPLI Insurance Any Different?
EPLI insurance is a type of protection for your business like worker’s compensation insurance, general liability insurance, and professional liability insurance. What makes EPLI stand out is its unique application to employee relations. Most employee claims like discrimination, negligence and wrongful termination are only covered by EPLI insurance. Therefore, if you have even one employee, EPLI insurance is essential to financially secure your company against defense costs. Additionally, as workers increase their expectations of employers, lawsuits are on the rise. It’s vital to take action to protect your business before a claim is made to avoid ruinous financial damage.
How Much Does EPLI Cost?
You’ll definitely want to have the expertise of a professional to make sure your bases are covered and give you an accurate estimate. However, to get the ball rolling, here are a few factors affecting price to keep in mind.
- According to Competitive Edge Insurance, insurers recognize high-risk fields and charge higher premiums in those sectors. High-risk industries include restaurant services, manufacturing, and businesses that rely heavily on employee interaction and teamwork.
- EPLI coverage for small businesses will cost much less than those for large corporations. Because they have fewer employees, there is less potential exposure to employee lawsuits.
- A deductible plan allows you to pay less for your plan as a trade-off for a higher deductible. However, deductibles can cost a significant amount before your EPLI coverage takes effect. This can give you some protection while also taking a gamble on your employees and potentially saving money.
- Your insurance company will take your business’s history of claims into consideration. Therefore, past lawsuits can bump up the cost of your EPLI coverage.
4 Straightforward Steps to Protect Your Business Against EPLI Insurance Claims:
Communicate clear and honest feedback in your performance reviews.
Pushing problems under the rug as a small business owner helps nobody, especially not you. Kellblog says that being upfront in performance reviews can keep your business running smoothly. It can also inform your employees of potential issues with their performance, so they aren’t blindsided by disciplinary action.
Simply being on the same page as your employees is an easy way to protect against an employment practices lawsuit. Honest performance reviews also provide powerful protection in the form of a paper trail, keeping your business and finances safe when threatened by wrongful termination EPLI insurance claims.
Develop clear and legally air-tight expectations.
Employee handbooks—that have preferably been read by your lawyer to patch its holes—are a must. In these handbooks, Nationwide recommends laying out procedures and job expectations explicitly, including policies surrounding discipline. Having a procedure laid out for missteps that includes documentation is also a good measure to stave off employment practice liability claims.
Play by the rules.
Between the government and your own handbook, you should have a pretty clear procedural guideline to follow. However, government rules and regulations are in constant flux. Be sure to stay up to date on employment laws including COBRA and labor laws to avoid costly mistakes that will eat away at your EPLI coverage.
Talk to one of HCP’s EPLI specialists.
Put the expertise of our dedicated agents to work to find your remaining liabilities and get insurance for your business that balances coverage and cost to fit your company.
Why should I choose Honig Conte Porrino for my EPLI coverage?
- HCP has more than 100 combined years of experience. We work with businesses of all types, so we understand your liability challenges whether you’re a retailer or restauranteur.
- We’ll pair you with an agent who can protect against the risks you face—not just the ones you ask about.
- We’re entrepreneurs too and we’ll protect your interests as if they were our own because your business is our business.
- As an independent brokerage, we aren’t tied to any one insurance carrier. This lets us shop around for the right combination of coverage and cost regardless of brand name.
If you have any employees, EPLI is a good idea to protect your pocket from employee lawsuits. At Honig Conte Porrino, our local, independent professionals are your advocates. We strive to get you the best coverage and know the ins and outs of complex insurance policies, managing insurance concerns while you can focus on getting more items off of your to-do list. Contact us to learn about partnering with an agent to free up some of your time while protecting your small business.
Keep Reading our Series of Articles on EPLI.
Part 1: Employment Practices Liability Insurance – Is Your Business Protected
Part 2: 5 Signs Your Business Needs EPL Coverage
Part 3: Do You Know Your Anti-Discrimination Laws
