Employment Practices Liability - EPL Insurance
Employment Practices Liability Insurance (EPL Insurance) is a policy covering wrongful acts committed by directors and officers, management personnel and employees arising from the employment process. The most common covered claims include: wrongful termination, discrimination, sexual harassment and retaliation. In addition, this policy can cover inappropriate work conduct, defamation, invasion of privacy, failure to promote, deprivation of a career opportunity and negligent evaluation. The EPLI policy is written on a claims-made basis and the limits are eroded by defense costs.
What you need to know about Employment Practices Liability Insurance:
Employment practices liability insurance coverage is a specifically designed policy and is, therefore, excluded from other policies such as the general liability policy or directors and officers policy.
Third party EPL Insurance coverage could save your business. Just a few years ago, not many insurance companies wrote EPLI that included third party coverage. This would cover claims mentioned in the definition above that are brought by your customers. Businesses that have a lot of contact with the public are more susceptible to these claims. Examples would be: hotels, restaurants, country clubs, medical facilities, schools and religious institutions.
Claims for workplace discrimination are rising quickly as the ethnic and racial composition of the country and the workplace change and evolve. Cultural aspects have become one of the most common starting points for discrimination cases.
It is important to review the EPLI policy to make sure that is does not exclude certain categories of claims such, assault and battery in a harassment context, wage-and-hour claims and claims alleging a violation of such laws as the Family Medical Leave ACT (FMLA), the National Labor Relations Act (NLRA), the Fair Labor Standards Act (FLSA) and the Occupational Safety and Health Act (OSHA).