By: John Byars
In today’s world with social media, political division and racial tension, employment practices liability insurance (EPLI) is more important than ever. With the division in our country, along with the rise of sexual and discriminatory harassment claims, it’s crucial that business owners protect themselves by not only putting proper policies in place, but also through adequate insurance coverage.
As a business owner, you may or may not be aware that approximately one-in-five commercial insurance claims right now are employment practice-related. As employees become more aware of their rights, it’s time you truly understand EPLI and ensure that you won’t fall victim to some common misconceptions.
Employment Practices Liability Coverage
EPLI basically covers anything that can be brought against an employer by an employee for something that has happened while being employed for that company. This includes discrimination based on sex, race, age or disability, wrongful termination, harassment, and other issues such as failure to promote.
Cost of Obtaining EPLI Coverage
The cost of EPLI is going to depend on a number of factors, which include the industry you’re in, the number of people you employ, and of course, the amount of exposures you have. While some industries are known to have a higher rate of EPLI claims than others, such as those with a 50/50 split in gender like the restaurant industry, this is also going to affect the cost of coverage. Even with that being said, EPLI coverage is still very affordable.
Misunderstandings Surrounding EPLI
The biggest misconception I hear far too often is business owners assuming that any type of liability claim is covered under their general liability. The fact is that general liability does not cover employment practice liability.
The second most common misunderstanding is that all employment practices liability coverage is created equal. The truth is, even if you have it, you may still have some major exposures since not all policies are going to include third-party liability.
Whereas second party liability is going to cover you if an employee files a lawsuit, third-party covers you from claims from the general public. For instance, if you’re a HVAC contractor with employees visiting customers at their homes, and the homeowner claims your employee said or did something to them, that’s a third-party claim that may not be covered. This is why it’s crucial to truly understand the ins and outs of your EPLI policy.
Reduce Your Risks of a Employment Practices Lawsuit
As an employer, it’s imperative to take steps to reduce your risk for an employment practices lawsuit. This begins with clearly outlining company policies and procedures, setting expectations, and keeping thorough and accurate documentation.
At the same time, you must keep in mind that despite your best efforts to reduce your risk, no employer is immune. Regardless of the size of the business or number of employees, every employer should have some coverage for employment practices liability.
Byars|Wright has developed into a major provider of commercial insurance that delivers a wide-range of insurance products with quality coverage at competitive prices. As an independent insurance agency, we represent numerous companies, all with a history of excellent service. Through these companies, we will find the best pricing and coverage available for our customers. We hope you’ll reach out to us today online, or give us a call at (205) 694-0088. At Byars|Wright, Relationships Matter.