Employment Practices Liability Insurance

Employment Practices Liability Insurance
 

Critical coverage if you have employees

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Today’s business environment is shaped by important legislation such as the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA). While these laws protect employee rights, they also increase the potential for employment-related lawsuits. As workplace claims continue to rise, it's more important than ever for business owners to consider Employment Practices Liability Insurance (EPLI).

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What is EPLI?

EPLI provides coverage for claims made by employees against your business, its executives, managers, and even other employees. 

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Even if you’ve done everything right, defending your business from these claims can be costly and time-consuming. EPLI helps protect your company’s financial stability and reputation.

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How does Employment Practices Liability Insurance Protect Companies?

While every business should rely on strong internal policies, clear communication, and fair employment practices as the first line of defense, even the most diligent companies can face legal challenges. That’s where Employment Practices Liability Insurance becomes an essential part of your risk management strategy.

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EPLI provides financial protection and legal support in the event of employment-related claims. The coverage can apply to a wide range of allegations, including:
 

• Discrimination — based on gender, age, race, religion, disability, or other protected categories

• Sexual harassment

• Wrongful termination or wrongful disciplinary actions

• Negligent hiring, compensation, or promotion practices

• Breach of employment contract

• Invasion of privacy

• Emotional distress or mental anguish

• Libel or slander in the workplace

• Mismanagement of employee benefits

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While some directors' and officers' (D&O) insurance policies may provide limited coverage for EPLI, this protection is typically restricted to the company’s executives and directors. Unfortunately, it does not extend to the wide range of employees within most businesses.

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Why is this important?

If your business faces a lawsuit involving an employee whether it’s a claim of discrimination, harassment, or wrongful termination, D&O insurance may not be enough to protect your entire workforce. EPLI, however, offers broader coverage that extends to all employees, ensuring you’re protected against claims made by any member of your team, not just the top executives.

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EPLI Policies Generally Exclude Some Coverage
 

Eternity Insurance Can Walk You Through the Details, So You Can Pick The Right Policy

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Like any insurance policy, EPLI has certain exclusions. It's crucial to be aware of these limitations to ensure you're fully informed about the scope of your coverage. Typical EPLI policies exclude coverage for violations of the following:
 

• Occupational Safety and Health Act (OSHA)

• Fair Labor Standards Act (FLSA)

• State Employment Law

• Consolidated Omnibus Budget Reconciliation Act (COBRA)

• Employee Retirement Income Security Act (ERISA)

• Punitive damages and intentional institutional claims
   

Additionally, the EPLI coverage included in a packaged policy may differ significantly from the terms of a typical general liability policy, which is why it’s essential to understand exactly what’s included and excluded.

 

Why You Need a Trusted Underwriter

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At Eternity Insurance, we recognize that each business is unique, and we’re here to guide you through the complexities of EPLI coverage. Our experienced brokers will take the time to explain the available policies, help you understand exclusions, and customize a coverage plan that best meets the needs of your business.