The number of lawsuits filed by employees against their employers is on the rise. While most suits are filed against large corporations, no company, regardless of size, is immune to such lawsuits.
Employment Practices Liability Insurance (EPLI) covers businesses against claims by workers that their legal rights as employees of their respective companies have been violated.
We often advise our clients that even the most upstanding of businesses should consider purchasing Employment Practices Liability Insurance. Remember, all it takes is an allegation of wrongdoing from a disgruntled employee for costs to mount dramatically.
Consider that even if you have successfully defended the company and it has been exonerated, what were the costs accrued to prove the company did not act wrongly in its employment actions?
The cost of Employment Practices Liability Insurance coverage depends on the type of business, the number of employees and various risk factors such as whether your company has been sued over employment practices in the past.
Employment Practices Liability Coverage insurance will pay for claims arising out of any of the following:
- Refusal to employ.
- Termination of employment.
- Coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination and other employment-related practices.
An Employment Practices Liability Insurance policy will reimburse your company against the costs of defending a lawsuit in court and for judgments and settlements. The policy covers legal costs, whether your company wins or loses the suit. Note, policies also typically do not pay for punitive damages or civil or criminal fines. Liabilities covered by other insurance policies, such as workers compensation, are excluded from Employment Practices Liability Insurance policies.
To prevent employee lawsuits, educate your managers and employees so that you minimize problems in the first place.
For more information, please reach out to the professionals at McMichael Insurance for assistance. We would be glad to help.
