What is EPLI?
Employment Practices Liability Insurance
Employment Practices Liability is an area of United States law that deals with wrongful termination, sexual harassment, discrimination, invasion of privacy, false imprisonment, breach of contract, emotional distress, and wage and hour law violations. The Equal Opportunity Employment Commission and the Dept of Labor, along with individual state compliance, interprets and enforces these laws.
The world is a very different place than it was a few years ago. The need for this coverage is directly impacted by the economy and devastating costs associated with claims. No entity is “too small”
for this coverage as it’s only takes one employee to file a claim. State laws can also be broader than the federal laws and can often times be very difficult to decipher due to lengthy definitions. For many employment related laws in Texas, companies with 1 or 4 employee minimums can be sued (again, depending on the law). Moreover, claims can also arise from third parties (not your own employees) as well. In 2013, there were about 1 million claims filed in the US, up from 2012. Your company most certainly carries general liability in the event of a slip and fall or bodily injury. For the second year in a row, there were more documented EPLI claims than general liability claims. This coverage is truly essential to protecting your business as litigation costs alone can be devastating.
Where do claims happen?
Discrimination/harassment (sex, age, weight, ethnicity, race, religion, pregnancy, disabilities, sexual harassment, hostile work environment, etc)
Wrongful termination or failure to hire
Fair Labor Standards Act (wage an hour claims)
ADA (Americans with Disabilities Act)
USERRA (Uniformed Service Employment and Reemployment Rights Act)
GINA (Genetic Information Nondiscrimination Act
The Top Ten Reasons Why To Buy Employment Practices Liability (EPL)
1. EPL covers not only actual but also alleged acts of discrimination,
harassment, retaliation, wrongful termination and other similar acts.
2. 3 out of 5 employers are sued by former employees every year.
3. Over 40% of EPL claims are against firms with fewer than 100 employees.
4. Some Federal and State employment laws apply to all employers – any size company has exposure!
5. The Equal Employment Opportunity Commission (EEOC) recorded nearly 100,000 charges in 2012 and obtained more than $365 million in settlements for claimants.
6. The financial ramifications of not having EPL insurance can be crippling, especially for small firms because they do not have the operating budgets to handle the defense costs, let alone settlements or judgments, of an uninsured claim.
7. The median compensatory award to plaintiffs is $325,000.
8. There is no EPL coverage under other insurance policies such as General Liability (GL). Any endorsement to another policy generally provides insufficient limits, does not provide the breadth of coverage of a separate EPL policy and erodes the limit available for the GL exposure.
9. Wage and hour litigation has quadrupled. More wage and hour
collective/class actions have been filed in recent years than any other types of employment class actions combined.
10. Gender discrimination, age discrimination and retaliation claims are on the rise. There are more women and “baby boomers” in the workplace than ever before. Recent Supreme Court decisions have lowered the standard of what constitutes retaliatory treatment