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Written by Adam Miller
EPLI: What This Insurance Covers And Why Your Business Needs It

Nearly all business owners are familiar with Workers Compensation Insurance, and many of them have it to protect against lawsuits or expensive out of pocket costs if an employee is injured or killed in the workplace. Another type of important commercial insurance policy should consider having is Employment Practices Liability Insurance (EPLI) coverage. EPLI coverage protects companies if they are sued for violating an employee's rights or demonstrating unfair treatment towards employees. In today's blog post, we'll look at what exactly EPLI covers, why businesses need it, and proactive steps they can take to protect against EPLI claims in the first place.

What Does EPLI Cover?

While it's nice to believe that all American workplaces are fair and supportive places for employees, the sad truth is that a workplace environment can become uncomfortable, unfair, or hostile for employees because of outdated policies, a negative corporate culture, or even an inappropriate supervisor. The end result can be an employee that sues because of workplace discrimination, wrongful termination, sexual harassment, retaliation, or defamation of character. Examples might include a worker who is passed up for promotion because of their gender, an employee who is sexually harassed by a supervisor, or a qualified job candidate passed over because of age or race. Employment Practices Liability Insurance (EPLI) helps companies facing lawsuits over these types of employee allegations, and can cover legal expenses, court fees, and judgments and settlements regarding these cases.

Why Businesses Need EPLI Coverage

Many businesses mistakenly believe that Workers Compensation Insurance is all the coverage they need to protect against lawsuits from current or former employees. This is an incorrect assumption, as Workers Compensation Insurance offers no financial support to companies if they are facing a lawsuit from an employee who may have experienced workplace discrimination, harassment, or a wrongful termination. EPLI is needed when an employee sues for a violation of their rights in the workplace, and not because of a workplace illness or injury. Also, companies need EPLI coverage because an employee could always file a lawsuit, no matter how long they've been with the company or how serious or minor the allegations may be. Without EPLI, a company could be paying out of pocket for attorney fees, court costs, judgments, settlements, and damages related to an employee's lawsuit, all of which could significantly harm a business.

How To Protect Employees and Avoid Lawsuits

The best defense against a lawsuit from a current or former employee is to make sure that there are company policies, procedures, and training in place to protect the interest of employees, as well as the company. For example, companies should make sure that all company guidelines are clearly defined in handbooks and that policies should be applied consistently and without preference or discriminatory actions. Employees should be trained to treat all other employees professionally and with respect, whether they are an entry-level new hire or the CEO. Job descriptions and recruitment and hiring processes should also focus solely on job-relevant skills and experience, and should not include any discriminatory actions or inappropriate questions. Finally, companies should also create and implement company guidelines for how to swiftly and effectively handle issues related to discrimination, harassment, retaliation, or other employee-related issues to ensure they are dealt with immediately. This can help mitigate a situation before it escalates, ensuring the employee's rights are not violated and hopefully avoiding a lawsuit.

Employment Practices Liability Insurance might not be as familiar as Workers Compensation Insurance, but it is just as important for a company to have this type of commercial insurance. Aegis Insurance & Financial Services strives to help companies of all sizes and industries get the protection they need in the event of a devastating lawsuit or other major issue. Contact the friendly and knowledgeable team at Aegis for more information about EPLI coverage, as well as our full range of other Commercial Insurance options. Call today at 713-850-7622, or complete our online form for a free quote!

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