Do You Need EPLI?

All business owners will understand the inherent value of quality employees. These individuals speak to your story, brand, productivity, and overall growth potential. No matter how many “good-boss” resources you may have up your sleeve, you should always be prepared in case of an employee lawsuit. In reality, the second you conduct an interview, you have employment risk exposure.

In 2020, over 37,000 individual retaliation charges were filed with the US Equal Employment Opportunity Commission (EEOC). This number doesn’t even begin to account for other charges filed with state or local agencies, or claims involving race, sexual assault… the list goes on. In short, even if you have healthy relationships with your employees, you can never be truly certain that current or former employees/interviewees have a grievance (credible or not) and plan to take action. 

A Practical Solution:

Employment Practices Liability Insurance (EPLI) is a management liability coverage designed to financially protect a business, its owners, managers, officers, and/or employees in case they are sued for wrongdoing. EPLI provides coverage for the following offenses (just to name a few):

• Wrongful termination
• Wrongful Discipline
• Discrimination
• Sexual harassment
• Retaliation
• Failure to employ or promote
• Hostile work environment

Your policy should clearly identify which claims are included and if it covers state and local laws. This means it’s critical to seek help from a trusted insurance advisor who will be able to sort through the fine print, determine which risks are most prevalent in your industry, and manage your policy’s language. Although a smaller policy often costs less, it could also mean that you’re not sufficiently protected.

Who Needs EPLI:

Today, EPLI is a necessity for anyone with employees or looking to hire staff. That’s right… anyone. Even if you employ staff to maintain your lifestyle, home, or investments properties, you will likely need EPLI. Some examples of home employees include:

• Nannies
• Housekeepers
• Security guards/Gate-keepers
• Chefs
• Personal assistants

Large corporations will obviously have more extensive EPLI coverage. The more employees, the greater the risk. However, startups and small businesses are usually still developing employee policies and don’t have the capacity for a legal department, so even if you’re in the growing stages, you should invest in EPLI.

Next Steps:

It’s never a bad idea to start writing an employee manual and maintaining records. Some insurance carriers ask to see these policies as it helps them gauge your risk level. This is especially valuable to small businesses in startups. Some of our insurance carriers have free resource libraries to help policyholders create written policies and procedures. As an employer, make yourself aware of the laws in place on a local, state, and federal level so that you are clear about expectations. Here is the official resource for your records.

We are always a phone call away and will happily guide your next steps based on your industry or personal lifestyle.

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