Employment practice liability insurance, or EPLI, covers your business in the event of an employee lawsuit. Whether a lawsuit is filed by a current, former or prospective employee, an EPLI policy will protect the company, as well as its current/former directors, officers and other employees.
Employment practice liability insurance can be purchased as a standalone policy or added to a commercial insurance package. Either way, your policy should include coverage for settlements and other legal expenses incurred due to a variety of claims, including:
Even with an EPLI policy under your belt, it’s important to take strategic measures to reduce your company’s risk of employee lawsuits. These include, but are certainly not limited to:
Also, once you acquire an EPLI policy, don’t drop it. Any gaps in your insurance history could be exploited in the case of an employee lawsuit. Many employment-related claims don’t arise until months or years after the alleged incidents, so make sure not to drop your coverage without a carefully constructed backup plan.
While large corporations typically have employment attorneys and in-depth employment practice policies, small businesses are much less likely to have resources like these at their disposal. With the average settlement being $40,000, an event like this could be detrimental to your business without the proper coverage.
For these reasons, it’s a wise idea for most small businesses with employees to invest in EPLI — especially considering employee lawsuits are on the rise in recent years. Consider purchasing an EPLI policy and taking other strategic steps to ensure a worry-free future for your company today.