EPLI is a type of liability insurance covering wrongful acts arising from the employment process. In a nutshell, it protects a company from having to suffer financial instability in the form of allegations that result in a lawsuit.
As an employer, you face a rising tide of employment practices litigation alleging discrimination, sexual harassment, retaliation, and other employment-related issues. Below are some scenarios that EPLI can protect you against:
Workers file lawsuits against employers daily. More than 1/3 of employee claims are made against medium to small businesses.When that happens, a business owner needs help. This is why you need Employment Practices Liability insurance (EPLI)
NOTE: New hires pose an employment practices liability risk too. There is an immediate risk of an employment claim from the moment a prospective employee is interviewed. For example, if you choose not to hire the interviewee, that individual could allege some sort of discrimination. Or, if you hire that person and later fire them due to poor attendance, that discharged employee could claim wrongful termination.
Tip: One question to ask an insurer is whether the costs of defending a claim in court count towards the payout limit for any damages. Also, look out for mention of a “claims made” basically that’s insurance jargon that means you are only covered if the policy is active both when the alleged incident took place and when the employee makes the claim.
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