EPLI provides coverage to employers against claims made by employees…
Employment practices liability insurance, known as EPLI, provides coverage to employers against claims made by employees alleging discrimination (based on sex, race, age or disability, for example), wrongful termination, harassment and other employment-related issues, such as failure to promote.
Small or new businesses are often the most vulnerable to employment claims. That’s because they usually lack a legal department or employee handbook detailing the policies and procedures that guide hiring, disciplining or terminating employees.
You can also add Third Party EPLI coverage, which covers liability claims brought by non employees (customers, clients, and vendors) against employees of the business, typically for sexual harassment or discrimination
Companies that have a lot of interaction with their clients, such as retail stores, doctor’s offices, or in the service industry are most susceptible to third-party liability claims. Third-party liability coverage is generally available by endorsement for additional premium and should be seriously considered by businesses that are confronted by these exposures.
To significantly lower your employment practices liability risk, do the following:
Develop an employee handbook detailing your company’s workplace policies and procedures, including attendance, discipline, and complaints.
Create a job description for each position that clearly defines expectations of skills and performance.
Conduct periodic performance reviews of employees and carefully note the results in their file
Develop a screening and hiring program to screen out candidates on paper before calling them to setup an interview
Use an employment application that contains an equal employment opportunity statement along with a statement, that if hired, employment will be “at-will,” meaning their employment can be terminated at any time – for any reason or for no reason at all – with or without notice.
Ensure that your employment application does not contain any age indicators, such as date graduated high school, as this could increase your risk for age discrimination claims.
Conduct background checks on all possible candidates.
Institute a zero tolerance policy regarding discrimination, substance abuse and any form of harassment.