Employment Practice LiabilityProtect against employee lawsuits with employment practices liability insurance (EPLI)Employment practices liability insurance, known in the trade as EPL insurance or EPLI, provides coverage to employers (PDF) against claims made by employees alleging:
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New hires pose an employment practices liability risk
You're at risk of an employment claim from the moment you interview a prospective employee. For example, if you choose not to hire the interviewee, that individual could allege some sort of discrimination.
Or, if you hire that person and later fire them due to poor attendance, that discharged employee could claim wrongful termination.
To significantly lower your employment practices liability risk (PDF), consider the following:
Or, if you hire that person and later fire them due to poor attendance, that discharged employee could claim wrongful termination.
To significantly lower your employment practices liability risk (PDF), consider the following:
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1. Review potential loss exposures with your insurance agent and purchase adequate employment practices liability insurance.
2. Develop an employee handbook detailing your company's workplace policies and procedures, including attendance, discipline and complaints. The employee handbook should also contain an employment at-will statement and an equal employment opportunity statement. 3. Create a job description for each position that clearly defines expectations of skills and performance. 4. Conduct periodic performance reviews of employees and carefully note the results in the employee's file. 5. Develop a screening and hiring program to weed out unsuitable candidates on paper before calling them to interview in person. |
6. Use an employment application that contains an equal employment opportunity statement along with a statement, that if hired, employment will be "at-will." This means their employment can be terminated at any time, for any reason or for no reason at all, with or without notice. Also ensure that your employment application does not contain any age indicators, such as date graduated high school, as this could increase your risk for age discrimination claims.
7. Conduct background checks on all possible candidates. 8. Institute a zero-tolerance policy regarding discrimination, substance abuse and any form of harassment. Make sure you have an "open door" policy in which employees can report infractions without fear of retribution. 9. Create an effective record-keeping system to document employee issues as they arise, and what the company did to resolve those issues. |
More about employment practices liability insurance
The cost of insuring your business for EPLI coverage depends on a variety of factors, such as:
EPLI coverage is usually written on a claims-made basis. This means the incident resulting in the claim had to occur during the coverage period. Because employment claims often come months or even years after the alleged incident, your company might be vulnerable if your insurance coverage was dropped or if tail coverage (liability insurance that extends beyond the end of the policy period) wasn't purchased.
Employment practices liability coverage includes free online support through our Workplace Risk Solutions website, which includes sample forms and policies; self-audit checklists; links to federal and state legal sources; and web-based training modules that cover the prevention of discrimination, harassment and other employment claims. EPLI also includes free legal advice from Jackson Lewis, LLP, one of the nation's largest and most respected employment law firms. Jackson Lewis’ free legal hotline can provide such legal advice as the steps to take when considering terminating an employee, as well as how employment laws apply to your workplace.
- The number of people you employ
- Whether you've had prior suits lodged against your company
- The percentage of employee turnover
- Whether you have established rules and practices in place
EPLI coverage is usually written on a claims-made basis. This means the incident resulting in the claim had to occur during the coverage period. Because employment claims often come months or even years after the alleged incident, your company might be vulnerable if your insurance coverage was dropped or if tail coverage (liability insurance that extends beyond the end of the policy period) wasn't purchased.
Employment practices liability coverage includes free online support through our Workplace Risk Solutions website, which includes sample forms and policies; self-audit checklists; links to federal and state legal sources; and web-based training modules that cover the prevention of discrimination, harassment and other employment claims. EPLI also includes free legal advice from Jackson Lewis, LLP, one of the nation's largest and most respected employment law firms. Jackson Lewis’ free legal hotline can provide such legal advice as the steps to take when considering terminating an employee, as well as how employment laws apply to your workplace.
Understand employment law
A variety of laws are in place to protect the rights of people you hire or are considering hiring. While employment practices liability insurance is a smart investment for many companies, it's important to understand and carefully follow these laws:
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Federal employment laws
Get more information about employment laws from the U.S. Equal Employment Opportunity Commission (EEOC).
Visit the EEOC website
Visit the EEOC website
