The Top Three Reasons to Consider EPLI Coverage

Natalie Sherod, CIC, CPCU, Risk Advisor
Employment practices claims continue to be a concern for employers of all sizes.  With the number of claims increasing, Employment Practices Liability Insurance (EPLI) should be discussed at every renewal and should be included as part of your insurance program.  Here are the top three reasons to consider EPLI coverage:

  • The number and cost of claims continue to increase each year – Even if a claim never makes it to court, it can have a large financial impact on an employer. The average cost for an employment claim settled out of court is $75,000.  If the case does move to trial, the cost significantly increases. The average jury award for an employment-related case is $217,000.
  • The coverage can protect your company against a variety of allegations – There are a number of reasons an employer could see an EPLI claim. Claims can fall under the following categories:
    • Discrimination – An employee alleges they were not promoted due to his age.
    • Wrongful Termination – An employee alleges they were terminated because of their religious belief.
    • Sexual Harassment – An employee alleges they are the victim of unwanted sexual advances from their manager.
    • Retaliation – An employee files a workers’ compensation claim and soon after is moved to a less desirable shift. They allege this is in retaliation for filing the workers’ compensation claim.
    • Inappropriate employee conduct – Alleged defamation, invasion of privacy, breach of employee contract, bullying, wrongful failure to employ/promote are a few examples of claims that fall under this category.
  • Many EPLI policies have the option to cover third party liability claims – Employment practices exposures are not only limited to current or recent employees. Claims could arise from applicants who feel they were discriminated against during the interview process, clients who allege sexual harassment by your employees, and vendors who feel they were passed over for a contract due to their religious beliefs.

There are many coverages to consider for protecting your business – be sure to include Employment Practices on that list.