Employment Practices Liability Insurance (EPLI)

When large companies and organizations are sued for workplace discrimination, libel, slander, or breach of contract, they usually have a team of lawyers and a large budget to deal with matters. On the other hand, smaller companies don't always have the resources they need to deal with these claims. That's where employment practices liability insurance (EPLI) comes in. EPLI is a type of commercial insurance designed to protect businesses if a current or former employee decides to take legal action for some reason.

 In general, EPLI claims fall under one or more of the following categories:

• Retaliation – Claims that the employer retaliated unfairly against a legal or protected action or decision made by an employee.
• Libel or Slander – Making public accusations without evidence to back them up.
• Negligent Hiring/Firing/Promotion/Demotion Practices – Hiring or promoting an unqualified candidate for some reason (such as nepotism) or firing or demoting a qualified employee for unfair or illegal reasons.
• Negligent Performance Evaluations – Giving an employee an unfair evaluation of their work.
• Negligent Supervision of Employees – When failure to supervise employees adequately results in harm or damages.
• Sexual Harassment – Inappropriate behavior that includes unwelcome sexual advances and other verbal or physical conduct of a sexual nature.

As you can probably imagine, these types of claims can happen at any time to businesses of all sizes. EPLI typically covers legal costs for relevant claims, whether you win in court or not–as long as the action you took wasn't illegal.

For most organizations, the company, officers and directors, employees, and management are all covered under an EPLI policy. However, you might want to look into D&O policies as well if you have a board of directors or high-level management who are responsible for making high-stakes decisions.

Most business insurance in Maryland doesn't necessarily cover lawsuits and claims brought by employees. Though general liability insurance is a must, an EPLI policy is catered specifically to these employee-related risks. It guarantees that you don't have holes in your coverage that could leave you unprotected if an unhappy staff member decides to sue.

EPLI also provides support for some of the most common complaints and suits that other business insurance policies don't cover, such as allegations of sexual harassment, a major issue in today’s workforce. Unlike standard business insurance policies, EPLI can help cover any legal costs as well as any monetary compensation associated with the harassment claim.

Most EPLI policies offer one million to 25 million dollars in coverage–and this type of professional liability insurance is more affordable than you might think. There are many different EPLI options that can work for your company’s budget.

If you're considering purchasing EPLI for your business, feel free to give WSMT a call. We'll connect you with a knowledgeable agent who can answer your questions and get you a quote fast.