Management Liability

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D&O

EPLI

Fiduciary

 

Employment Practices Liability Insurance

 

With the passage of Civill Rights Act of 1991 came the emergence of EPLn or EPLI, Employment Practices Liability Insurance. This law allowed punitive damages to be awarded in employment discrimination cases and provided for jury trials in cases of discrimination (juries have historically been much more sympathetic to employees than they are to employers). 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 someone in top management or an entry-level employee. And most policies will cover the cost to settle a case out of court, as well as defense costs if an employee lawsuit goes to court. 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 decide the coverage too costly.  Small-business owners with employees should consider buying employment practices liability insurance, but it’s especially important in industries that have high rates of employee turnover.  Increased media attention to workplace discrimination has led to an increase in employee claims against all types of businesses. Every business with employees should consider purchasing EPLI