As a business owner, you understand the importance of having adequate Workers Compensation Insurance. Everyone knows this is a necessary form of business insurance that their company is legally required to have.
But what about Employment Practices Liability Insurance? Will your company be protected if an employee sues because of your employment practices?
Employment Practices Liability Insurance (EPLI) protects business owners against lawsuits that stem from employment-related issues.
There are many different types of EPLI, which means you can opt for a package that will fit your company’s unique needs.
Nonetheless, most forms protect against lawsuits based on the following claims:
· Wrongful Termination: This suit is based on the claim that an employee’s termination n breaches at least one term of their contract and/or was otherwise unlawful.
· Discrimination: This claim alleges that the employee was treated unfairly because of their sex, age, race, or disability (e.g. they weren’t promoted because of one of these traits).
· Sexual Misconduct or Harassment: Any claim of unwanted sexual advances or remarks would qualify for this lawsuit.
· Defamation of Character: This suit would be filed in reaction to an alleged false statement being made – either verbally or in writing – with the intention of hurting an employee’s reputation.
· Invasion of Privacy: An employee could allege their privacy was invaded if an employer searches their private space (e.g. the drawers of their desk) or conducts surveillance of them in an area where they should expect privacy (e.g. the bathroom).
While EPLI doesn’t cover bodily injury or other liability claims, it will provide for any financial damages, which would include the cost of legal defense.
Pennsylvania insurance laws do not require companies to take out EPLI insurance.
However, EPLI insurance is the only alternative to paying out of pocket if you are ruled against because of one of the aforementioned legal situations.
Similarly, New Jersey insurance laws don’t mandate that businesses have to take out any type of insurance other than coverage for employee compensation.
However, most companies still take out EPLI because even if they’re eventually exonerated, the cost or defending themselves can be substantial.
Accurately quoting the price of EPLI is nearly impossible without knowing certain things about your individual company.
The following are the most important factors an agency will consider before quoting you for this vital form of business insurance:
· Number of Employees: The more people a company has hired, the more people who could file a claim against them. This increased exposure to risk may lead to a higher quote.
· Employee Turnover Rate: Higher turnover rates make it more likely that someone could file a wrongful termination suit, or some other claim related to employment practices, which would increase costs.
· Size of Your Company: Larger companies often have sizable revenues and, thus, more to defend, which usually increases premiums and limits.
· Hiring and Termination Practices: If your hiring and firing practices seem to lend themselves to a higher likelihood of wrongful termination and discrimination lawsuits, expect to pay more for EPLI.
· Claims History: As with most forms of insurance, your EPLI coverage will cost more if you have had claims filed against you, especially in the past few years.
Again, these are merely factors that may play a role in the cost of your coverage. To learn more, it’s best to speak to an actual agency with experience.
That’s where Valor Insurance, The Snipes Agency would be happy to help. Our company can leverage 35 years of combined experience in offering this critical form of business insurance to clients throughout New Jersey and Pennsylvania.
If you’d like to learn more about EPLI or receive a quote for coverage, please contact us today at firstname.lastname@example.org.