Protect Your Business: Understanding the Importance of EPLI Insurance

Dec 31, 2020 | Business Insurance

Did you know that around 3 percent of businesses with 50 employees or less have employment practices liability insurance? This could be the breaking point for a lot of businesses if they aren’t insured for the unknown. EPLI insurance protects your business from employee lawsuits and claims.

If an employee says they have faced discrimination in your business you could be taken to court and have to pay a lot in legal fees, which may bust your company. To help protect yourself from the unknown and to keep your business running you should have EPLI. Keep reading below to learn more about this insurance.

What Is EPLI Insurance?

Employment practices liability insurance, or EPLI, is insurance that offers businesses protection from offenses against employees. These offenses or even perceived offenses can be things related to promotion standards, the hiring process, and even discrimination. Having EPLI will help you to cover any employee lawsuits if they were to arise.

In 2019 the national EPLI was published by the National Law Review. This document outlined what EPLI will cover. Below we have made a summary of the items EPLI includes.

Labor

It’s well known that hiring undocumented workers is bad for your business. This isn’t because undocumented workers have a poor work ethic but because it’s against the law to hire them.

In a majority of states businesses that hire undocumented workers can have their business licenses taken away. This becomes an issue for the business when it faces increasing regulation and scrutiny in regards to its hiring practices.

Your EPLI coverage can help protect your business if you find that you’ve hired undocumented workers. This especially comes in handy if you have a trade industry company.

Me Too litigation

The Me Too movement happened not too long ago and it made a change in the world. Since this movement, more light has been shed on sexual harassment, even when it happens in the workplace.

After the movement, businesses were hit hard and had to dish out money to end sexual harassment in the workplace. This expense may have gone to education about what not to do in the work environment and even to legal fees. EPLI will help to cover some of these fees if sexual harassment cases were to arise or even if you want to educate your workforce.

Pay Equality

In today’s world, there are several groups that are focused on having to pay equality in every workforce. These groups include minorities, women, and more.

Pay equality has become a very big issue with many employees in the workforce If it comes up that there wasn’t pay equality in your business EPLI can help you cover any expenses that will arise.

Pregnancy and Lactation Accommodation

Is your office-appropriate for any breastfeeding moms? If not, you may face a lawsuit if a new mom doesn’t have an appropriate place to pump and store her milk. Your EPLI will even help to protect against any pregnancy discrimination lawsuits.

Website Accessibility

This may seem like a thing that applies more to consumers and customers rather than employees. You may not know that website accessibility is an ADA issue.

If someone with a disability can’t navigate your website there’s a good chance that a potential employee with that disability can’t either. Even if an employee has an accident and becomes disabled your website must be easily accessible for them.

This is when EPLI comes in handy in case an employee files a lawsuit against you for having poor website accessibility. After all, it’s on your company to keep up with the website and to ensure it can be accessed by anyone and everyone.

What Doesn’t EPLI Cover?

We have discussed what’s covered by EPLI but you should also be aware of what this insurance doesn’t cover. Even though EPLI is great to have for your business it doesn’t cover every type of employment-related claim.

Employee illnesses and injuries aren’t covered by EPLI. You will need to purchase worker’s compensation insurance in addition to your EPLI.

Employee theft also isn’t covered by EPLI. For this, you’ll need commercial crime insurance.

Professional errors that arise that result in employee lawsuits aren’t covered either. You will need professional liability insurance on top of your EPLI.

Union disputes are another thing that EPLI won’t cover. Management decisions such as improper use of company money aren’t covered either. For things under this umbrella, you will need to get directors and office insurance.

Why Should I Get EPLI For My Business?

Above we listed only a few things that EPLI covers. Having EPLI is vital for any business of any size and something that you should invest in to help your company thrive even in the hardest of times.

If an employee of the past or present files a suit against your company for anything discriminatory then you could be facing a lot of money in court fees. These expenses are sometimes enough to make businesses cripple and close their doors for good.

EPLI will help to protect you from the pre-hiring process to the exit interview for every employee. This even includes any seasonal or temporary hires you have taken under your roof.

EPLI will help you to cover any court fees so your business doesn’t have to shut down. You may think that this will never happen but its better to be safe than sorry.

The Top Reasons Why Your Business Needs EPLI

If you’re not convinced that getting EPLI for your business is the right thing to do we are here to tell you the top reasons as to why you need to get it. Below you will find our top reasons so you won’t say no to EPLI insurance ever again.

Your Current Insurance May Not Work Against Employee Claims

You probably already have insurance for your company, but is it as good as EPLI? Commercial liability policies usually don’t include or cover EPLI claims. There are even some policies that exclude EPLI claims.

You should make sure that your current insurance policy covers EPLI claims. If you find that your insurance doesn’t cover a lot or any of them you should look into changing your insurance as soon as possible because you never know when an employee lawsuit will arise.

Employee Lawsuits Are Growing

According to the Equal Employment Opportunity Commission, in the last 10 years, employee filings with them have increased by over 20 percent and this is one of the most important EPLI insurance statistics. This means that employee lawsuits against employers are increasing.

This rapid increase makes it an ever-growing risk for any business that has employees. To protect yourself from this looming risk EPLI will help to give you peace of mind.

Settlements Are Growing In Price

Settlements are getting more expensive as the number of employee lawsuits grows. This means that the more money your business has to dish out to settle with an employee can end up hurting your business. It’s estimated that the average settlement cost for employment practice claims is around $70,000.

Being Fault-Free Will Cost You

When employment practice claims arise you have the option to be fault-free. But even if your business is fault-free you will still face some costs.

These costs will include legal defenses and the fees that come along with employment practice claims. Overall, these fees are unavoidable but can be made a little bit sweeter with EPLI.

Any Size Company Is at Risk

You may think since you have a small company with only a few employees that EPLI isn’t worth it or really necessary. The truth is that EPLI is important for any business of any size that has employees on the payroll. Being prepared is important as a business owner and EPLI helps to prepare you for the unexpected.

Now You Know How To Protect Your Business With EPLI Insurance

We have given you the rundown on EPLI insurance. You now know what EPLI insurance is and what it protects your business against. You’re also aware of how EPLI is vital for any business, no matter what the size or number of employees are on the payroll.

EPLI will help to protect your business from the unexpected and being prepared is better than dishing out a lot of money in legal fees. To learn more about insurance and to get more information on EPLI be sure to check out the rest of our website.

If you have any questions or suggestions, don’t hesitate to contact us. We’d love to hear from you.