Employment Practices Liability Insurance (EPLI) for Businesses
Employers can be sued for a large variety of reasons, don't let employment practices be one that is missing insurance coverage
Employment Practices Liability Insurance (EPLI) is a vital coverage that no business should be without. In today's complex and litigious business environment, companies face a range of employment-related risks, and EPLI provides essential protection against these exposures.
When a business has employees, it opens itself up to a host of additional liabilities that can only be adequately covered by EPLI. Claims related to harassment, discrimination, unfair termination, and other employment practices are among the leading causes of legal actions against businesses. Without proper coverage, companies can face significant financial and reputational damage.
By offering EPLI to your business clients, you can help them protect themselves from the potentially devastating consequences of employee allegations. This coverage ensures that they have the necessary resources to defend against claims and mitigate any resulting damages.
And it's not only claims against the business itself that EPLI can cover; some third-party endorsements provide protection when an employee is accused of engaging in covered inappropriate behavior towards a client, vendor or subcontractgor.
By offering EPLI to your clients, you can help them safeguard their businesses from the potential fallout of employee misconduct. This coverage ensures that they have the necessary support to address allegations, conduct thorough investigations, and take appropriate action to protect their customers and their reputation.
When considering EPLI policies, there's a few things all agents need to be aware of.
Definitions. It's important to understand key terms as carriers may be using their own forms. What is covered in one policy, may not be covered in another.
Defense Limits. Some policies provide defense coverage within the policy limits, while others offer coverage outside the limits or may have sublimits for defense.
Deductibles. Many claims-made speciality coverage policies carry a deductible. The higher the deductible, the lower the premium may be, but also the less financial protection. Discuss deductibles with the insured and let it be their decision on the amount.
Retroactive Dates. Since most of these policies are going to be written using a claims-made trigger, you need to be aware of any prior coverage, to make sure you can pick up possible earlier exposures.
Duty to Defend. Most liability policies require the insurance company defend the insured even if a claim is groundless. But there are a few policies out there that instead only indemnify an insured after liability has been established. It's rare to see an EPLI policy with an indemnity clause, but there are some out there.
Understanding these distinctions is crucial as it can significantly impact the financial protection provided by the policy.