Why Your Business Needs Employment Practices Liability Insurance (EPLI)
In today’s complicated employment world businesses, even small ones, need to be ready when it comes to employees and volunteers. Everybody knows how complicated and time consuming lawsuits are, and it is no different when one is hit with an employment related one. Not only can it affect productivity, but it can also distract workers and erode morale.
During the last 20 years, employment related lawsuits have risen 400%, with Wrongful Termination topping the list. Strange as it may seem, one is now more likely to get sued than get fired at their job. And, it’s not just big companies that are susceptible. Statistics suggest that 41.5% of lawsuits are brought against companies with less than 50 employees! Even more astonishing is that the average cost of settling a case is around $75,000, while the average jury award if you go to court and lose is around $217,000.
Employment related cases are not just about Wrongful Termination. Businesses get sued by their employees for a myriad of different reasons, that can be sometimes groundless, but the cost of defense is what can add up rather quickly. Despite all these numbers, 70% of businesses do not carry employment practices liability insurance. This can be a costly mistake for businesses and their owners.
So, what is Employment Practices Liability Insurance or EPLI?
Employment practices liabilities insurance or EPLI is a type of insurance policy that is specifically designed to protect employers from lawsuits brought about by employees. It covers many situations that General Liability insurance specifically excludes coverage for [please read your policy as not many people are aware of this]. Some main points to consider when understanding your exposure:
- You employ more than yourself (one person)
- Discrimination claims can include “alleged” emotional and/or verbal abuse
- Harassment claims not only stem from traditional sexually related content, context, or conduct, but also religious bias and transgender discrimination
- Negligent hiring practices and the subsequent supervision of employees by other managers can constitute a claim
- Some retail companies may be in Violation of the Americans with Disabilities Act Amendments Act of 2008 (ADAAA)
- Wrongful termination claims can exist where family-leave and pregnancy variables are present
- Social media usage has now amplified many different claims that are not just limited to one’s physical location or that sometimes we are now a 24-hour work day society
- Wage and hour claims that involve demotions or the failure to promote one over another
- Retaliation claims against existing employees are common that don’t even involve the owner
- Following State jurisdictional labor and workforce guidelines is not enough
The best way to protect your business against a costly lawsuit, even if groundless, from a defense cost perspective is to #ProtectWhatYouHave with an EPLI insurance policy.
Contact the Del Duke Insurance Group to make sure that you’re Protecting What You Have with a review of your business insurance portfolio.