Our nation is walking on pins and needles as every pocket of society is fraught with tension due to allegations of sexual harassment and discrimination. As a result lawsuits are becoming rampant, and it seems no one is safe. It is essential to know how to protect yourself as a business!
EPLI (Employment Practices Liability Insurance) can protect against many employee lawsuits, including claims of:
- Sexual harassment
- Discrimination
- Wrongful termination
- Breach of employment contract
- Failure to employ or promote
- Wrongful discipline
- Wrongful infliction of emotional distress
Smaller companies (less than 20 employees) can often purchase this coverage as an endorsement to their Businessowners Policy (BOP). An endorsement changes the terms and conditions of the policy. Larger companies may need to purchase a separate policy.
The cost of EPLI coverage depends on your type of business, the number of employees you have and various risk factors such as whether your company has been sued over employment practices in the past. The policies will reimburse your company against the costs of defending a lawsuit in court and for judgments and settlements. The policy covers legal costs.
Some lawyers and groups say the policies may help perpetuate abuse by allowing companies to avoid confronting the problem head-on. Payouts can help prevent financial ruin, but it can mean the perpetrators of these injustices feel protected and thus are less likely to stop their behaviors. It’s important to not only have the coverage to protect your company from this type of lawsuit but also to prevent these lawsuits.
This means educating your managers and employees so that you minimize problems in the first place:
- Create effective hiring and screening programs to avoid discrimination in hiring.
- Post corporate policies throughout the workplace and place them in employee handbooks so policies are clear to everyone.
- Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Make sure supervisors know where the company stands on what behaviors are not permissible.
- Document everything that occurs and the steps your company is taking to prevent and solve employee disputes.
https://www.iii.org/article/what-employment-practices-liability-insurance-epli
http://www.programbusiness.com/news/more-companies-are-buying-epli
by Sandra Czak
