At HRN, we get questions all the time about EPLI insurance. What is it? What will it do for me? What does it cost?
Below is an overview of EPLI from our longtime vendor partner Baker Romero.
I’m reaching out today to highlight an often-overlooked aspect of risk management: employment practices liability insurance (EPLI). EPLI coverage can be purchased by itself or in combination with Directors & Officers Liability.
While there is no standard insurance policy form, most EPLI policies are written on a claims made basis and carry a retention (deductible).
Additionally, EPLI policies will include defense coverage inside OR outside the liability limits. If you have an option, purchase EPLI coverage with the defense cost outside of the liability limits for broader coverage.
EPLI serves as a safety net for businesses against claims brought forth by employees alleging wrongful employment practices. These include, but are not limited to:
- Discrimination (age, race, gender, disability, etc.)
- Harassment (sexual or otherwise)
- Wrongful termination
- Retaliation
- Breach of employment contract
- Failure to promote
- Invasion of privacy
The absence of EPLI coverage can lead to financial repercussions, including legal fees, settlements, and reputational damage.
For instance, the cost for an organization to defend against a single-employee lawsuit can easily range from $40,000-$120,000. Furthermore, companies embroiled in lawsuits often divert substantial resources toward defense, leading to prolonged resolution periods.
Also, just a reminder that your general liability insurance policy does not provide any defense coverage for employment related claims and lawsuits.
Given these trends, businesses of all sizes and industries are vulnerable to employment-related claims.
EPLI provides an effective defense, safeguarding your business from the potentially devastating impacts of such claims.
