Sometimes employees, whether they are currently working for you, previously were employed by your business, or are aspiring hires, have “less than stellar” intentions. When this happens, your business could be besieged by lawsuits that, between legal fees, settlements, and other things, might force you into bankruptcy. After all, those expenses can add up and quickly empty your company’s bank account.
So, what are your options when it comes to protecting your business from employee lawsuits? Employment Practices Liability Insurance, also known as EPLI, is your best bet. Let’s explore the options.
What is Employment Practices Liability Insurance?
Employees can sue their current or former employer for many different reasons. Things like sexual harassment and gender discrimination often hit the top of the list, and it doesn’t matter whether the issue occurred or not, your business ends up needing to pay legal fees and more to fight the legal batter. This is where EPLI comes into play.
This insurance policy is designed to help your company by covering those legal fees, court costs, and even monetary settlements. It’s different from your general liability insurance because those particular policies pay for injuries, damages, and other things that physically occur on your property. EPLI doesn’t cover the physical, only the other reasons why your business might be sued.
An Example
For example, if an employee is fired for not doing their job properly, they may turn around and file a lawsuit against your company for discrimination, wrongful firing, or even sexual harassment against a supervisor. Even if these things aren’t true, your business will need to defend itself against these allegations, both in the public eye (if the news hits the media) and in the courtroom.
In order to defend your business and employees against these allegations, you’ll need to hire a lawyer, which can be extremely expensive. Other fees, like court costs and potential settlements, are additional expenses that your company may have to pay for. If you have an EPLI policy, it will prevent money from coming directly out of your business’ bank account. Instead, your insurance policy will cover it. This makes it less damaging, at least monetarily, to your company.
What EPLI Covers
In general, an EPLI policy covers things like sexual harassment suits, accusations of discrimination both in the workplace and during the hiring process, breach of contract, retaliation, and more. It covers most of the larger legal issues that a general liability policy won’t cover.
What Doesn’t EPLI Cover?
As with all insurance policies, there are some limitations. For example, EPLI won’t cover situations where your business or one of your employees has committed fraud or participated in criminal activities under the guise of the company. It also won’t cover punitive damages, government regulatory fines, or physical injuries to your customers or employees. You’ll need other types of insurance coverage for those occurrences.
Contact Spivey Insurance
Does your business need EPLI to protect itself from employee lawsuits? Do you have questions about these policies or wonder just how your company would be protected by one? If you answered yes to either of those questions, please reach out to Spivey Insurance. Our knowledgeable agents can help you find the right policies and coverage for your business.