Does your company need an EPLI Policy?
What is EPLI? – Employment Practices Liability Insurance
EPLI is intended to cover companies from lawsuit claims from employees for a violation their legal rights as employees. This may include claims for sexual discrimination, sexual harassment, wrongful termination, age discrimination, or other legal employment areas. Note that EPLI is distinct from other kinds of business insurance such as D&O (Directors and Officers) and E&O (Errors and Omissions). D&O insurance is commonly associated with publically traded companies where directors and officers have a fiduciary obligation to act in the best interests of shareholders. E&O insurance is designed to cover damages from third parties (clients and others) who may claim to be harmed by the faulty advice or actions (or lack of advice or actions) of a person in the company. It may be referred to as Malpractice Insurance or Professional Liability insurance.The BNA guide on EPLI
Does your company need EPLI?
Do you have managers, supervisors and employees? It sounds simple but every business that acts as an employer has the possibility of exposure to lawsuits from employees or former employees. Companies with inadequate HR processes and practices are most at risk for employment related lawsuits. Small and medium sized businesses are usually mostly focused on operational subjects and sales and revenue growth. Implementing supervisor training on HR legal areas like sexual harassment and discrimination training is usually not given a high priority and therefore creates more exposure to lawsuits. In addition the employment related laws are ever changing regarding what constitutes a “best practice” way to handle sensitive human resource related subjects.Employers need to know what the EEOC expects.
What does EPLI insurance cover?
EPLI covers a company’s expenses related to defending lawsuits from current and former employees for: Wrongful Termination, Sexual harassment, Discrimination, Breach of employment contract, Failure to Employ or Promote. Wrongful Discipline, Wrongful infliction of emotional distress and other related employment areas. Of course there are legions of lawyers who are actively seeking to represent anyone with a claim, maybe targeting your company. A Google search of “sexual harassment lawyer” returns over 1 million page results… that’s a lot of hungry lawyers.Lawyers want to talk to your employees
Why clients with PEOs get their better rates for EPLI coverage
For many businesses, hiring a Professional Employer Organization or PEO is a great way to reduce costs for EPLI. For every risk area outlined above, a PEO works actively with their clients to implement HR practices that reduce the exposure to employment related lawsuits. PEOs are experts on HR matters and have designed programs that reduce a company’s legal exposure while also providing best practices that make your company a great place to work. Insurance companies will base costs for EPLI insurance based on company size and their perceived risk for legal claims. If your company has a no HR department, no employee handbooks, no sexual harassment training for supervisors and a history of of bias or harassments suits, then you will be rated accordingly. However insurance companies know that companies using a PEO have better HR practices and a lower risk of lawsuits and will often offer EPLI coverage as part of the PEO’s services at a much reduced rate. For more information about how using a PEO can reduce your company’s employment related risks, contact StaffMarket.What HR services a PEO can provide