Employment Practices Liability Insurance

With the passage of Civil Rights Act of 1991 came the emergence of  EPLI, Employment Practices Liability Insurance. This law allowed punitive damages to be awarded and in some employment discrimination cases would provide a jury trial. Juries have historically been much more sympathetic to employees than they are to employers. Increased media attention to workplace discrimination has led to an increase in employee claims against all types of businesses These heightened exposures paved the way for an increase in employee civil rights lawsuits and created the need for an insurance product to protect against claims alleging offenses such as discrimination, wrongful termination and sexual harassment.

Generally, EPLI will cover actions committed by anyone within the organization, whether that’s management or an entry-level employee. And most policies will cover the cost to settle a case out of court, as well as any accumulated court costs if an employee's lawsuit goes to trial. .That said, every EPLI policy is different, so it’s wise to read the fine print.

Around 3% of businesses with less than 50 employees have EPLI. Many small-business owners are unaware that EPLI coverage exists, or decided that the coverage is too costly. It is especially important for any business that has high rates of employee turnover.   Every business with employees should consider purchasing EPLI.