EPLI covers businesses against claims by workers that their legal rights as employees of the company have been violated. The number of lawsuits filed by employees against their employers has been rising. This coverage provides Employer protection from a range of employee-based lawsuits.
The employment practices liability exposure begins when a business hires its first employee. A new employer must first identify the job responsibilities of the employees they seek. The business must clearly define the job requirements and expectations, the training needed and the training the employer will provide, as well as the output expected of each type of employee. If employer expectations differ from employee perception of the job duties and compensation, EPLI claims may follow.
The employer must develop excellent recruitment and hiring practices. Its procedures should be carefully evaluated and published in a manual that every supervisor is expected to read and understand. The procedures must be monitored to make sure all are followed in every circumstance.
EPLI exclusions must be examined carefully because many of them have conditions, exceptions, limitations or restrictions. Coverage does not apply to:
The employment practices liability exposure begins when a business hires its first employee. A new employer must first identify the job responsibilities of the employees they seek. The business must clearly define the job requirements and expectations, the training needed and the training the employer will provide, as well as the output expected of each type of employee. If employer expectations differ from employee perception of the job duties and compensation, EPLI claims may follow.
The employer must develop excellent recruitment and hiring practices. Its procedures should be carefully evaluated and published in a manual that every supervisor is expected to read and understand. The procedures must be monitored to make sure all are followed in every circumstance.
The cost of EPLI coverage depends on your type of business, the number of employees you have and various risk factors such as whether your company has been sued over employment practices in the past.
This policy will reimburse your company for defense (legal) costs, judgements and settlements.
The policy covers legal costs, whether your company wins or loses the suit. However, this type of policy does not typically pay for punitive damages or civil or criminal fines.
EPLI coverage is usually written on a claims-made basis. This means the incident resulting in the claim had to occur during the coverage period. Because employment claims often come months or even years after the alleged incident, your company might be vulnerable if your insurance coverage was dropped or if tail coverage (liability insurance that extends beyond the end of the policy period) wasn’t purchased.
Here are some basic strategies and processes to put in place that help prevent employee lawsuits:
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