What is EPLI?
Employment Practices Liability Insurance (EPLI) provides protection for Employers against claims made by their employees regarding their rights. These claims may come in the way of sexual harassment claims, prejudice based on race, gender, age, breach of contract, wrongful termination, mismanagement of employee benefits and more. In recent years these claims are becoming more and more common. Most people believe that only large corporations see these types of claims but the truth is that smaller businesses are much more vulnerable to them and have more to lose if they do not have a policy in place.
You may have heard of the #MeToo movement on TV and the media. Although it was celebrities that brought notoriety to the subject, it has helped bring to light the very serious subject of sexual misconduct in the workplace to businesses worldwide both large and small. Thanks to this movement, employers are taking more precautions with training, updating their employee handbooks, and developing company policies that promote a more respectful and accepting working environment. This is a step in the right direction but it does not negate the need for protection. One claim could bankrupt a small business with the cost of legal representation alone - regardless of whether or not the claims are true.
Here are a some real life examples:
Joe is a contractor. He owns a small handyman business with 4 employees - 3 field employees and one secretary, Sally, in the office. Sally has been a faithful employee for 30 years. Joe has always been very happy with Sally's performance up until about 1 year ago. In the last year her performance has been slipping at a fast rate. She is missing invoices, forgetting to send out quotes, getting angry with clients, misspelling VIP clients' names on letters among other things. Joe has been trying to gently nudge Sally to retire for 6 months, even offered her a severance package, but Sally refuses. Joe has no remedy except to fire Sally. Sally decides to sue Joe for Age Discrimination as she believe he wants to hire his younger, more attractive niece. Was Joe wrong to fire Sally?
Annie is excited about her new job at a Startup business. She has been offered the highest salary of her life and she can't wait to start earning. Work is going well but Annie is so busy with sales that she forgets to sign up for health insurance. Her boss, Michael forgets too. Annie goes for a joy ride in her new BMW over the weekend. Annie totals the car after spinning out on a slick highway into a telephone phone.Annie has 4 broken ribs, 2 broken arms, a concussion and a torn meniscus. She is rushed to the emergency room for surgery. Annie has no insurance. With 3 months of recovery ahead, Annie decides to sue the Startup business for negligence.
These are just 2 of many situations that could impact your business.Even the very best boss, with the very best practices could fall into an employment lawsuit.
EPL insurance is not automatic in your Business Owners Policy. Most standard companies offer it as a separate coverage and can be quite affordable depending on your trade and risks. It is worth it for the legal fees alone. No business (big or small) is exempt from this risk. No matter how great a boss you think you are, talk to your agent today and get some backup.
Svendsen Agency offers EPL Insurance with many of its carriers. Call today to hear more.
Serving the New Haven, Hartford, Litchfield, Fairfield, Middlesex, Windham, New London and Tolland counties for over 73 years.