Employee Practices Liability Insurance (EPLI)

Employee practices liability insurance (EPLI) covers businesses against claims by workers that their legal rights as employees of the company have been violated. Companies of all sizes are vulnerable to this risk. Some insurers provide this coverage as an endorsement to their business owners policy (BOP) for smaller companies. Other companies however, offer EPLI as a stand alone coverage. Under the stand alone coverage, third party liability coverage is automatic.

EPLI provides protection against many kinds of employee lawsuits including claims of:

• sexual harassment
• discrimination
• wrongful termination
• breach of employment contract
• negligent evaluation
• failure to employ or promote
• wrongful discipline
• deprivation of career opportunity
• wrongful infliction of emotional distress
• mismanagement of employee benefits plans.

The cost of this coverage depends on the type of business, number of employees and various risk factors. The policy will reimburse your company against the costs of defending a lawsuit in court and for judgements and settlements. The policy covers legal costs whether you win or lose.

To prevent employee lawsuits, educate your managers and employees so that you minimize problems.