The Clarity Blog


The Clarity Blog

What is Employment Practices Liability Insurance?

on Mar 17, 2016 11:00 AM

As a manager or owner of a business, what are some of the most difficult decisions that you've had to make?

Even if they're not the first things that come to mind, hiring and firing decisions probably fit somewhere in that category.

Maybe it's because of the emotions involved. Or perhaps there are financial stakes at play. Whatever the reasons are, creating new ties with another person or severing old ones often results in high stress.

After exhausting yourself to execute on these decisions, the last thing you want is something even more stressful to ensue as a result of your actions  namely, an employment practices lawsuit. 

employment practices lawsuit 

However, if you're asking yourself, "What is employment practices liability?" after a management decision has been made, you may find the answer after it's too late. 

Thankfully, you can be protected with EPL  Employment Practices Liability insurance. 

What does EPL protect against?

EPL protects your business from hiring to firing and every employment-related issue in between. Actually, it can even provide protection before an employee is hired. Some individuals have claimed discrimination during the hiring process after they were not selected for a job that they felt they were qualified for.

Aside from the wrongful refusal to employ a qualified applicant, these are some other common claims scenarios that an EPL policy from Jewelers Mutual covers:

  • Wrongful failure to promote, wrongful deprivation of career opportunity, or employment related misrepresentation
  • Wrongful demotion, evaluation, reassignment or discipline
  • Wrongful termination, including retaliatory or constructive discharge
  • Unlawful work-related harassment, coercion, discrimination or humiliation as a consequence of race, color, creed, national origin, marital status, medical condition, gender, age, physical appearance, physical and/or mental impairments, pregnancy, sexual orientation or sexual preference or any other protected class or characteristic established by any applicable federal, state or local statute
  • Slander, defamation or libel through oral or written publication, or violation or invasion of a right of privacy

To learn more about employment laws, visit the Equal Opportunity Employment Commission's website.

Who can make an EPL claim?

It doesn’t need to be an owner or a partner of a business acting unprofessionally, just as the harassment doesn’t need to happen to an employee. Claims can result from employee-to-employee or employee-to-third-party harassment.

Aside from applicants or any former, current, leased or temporary workers, an EPL policy from Jewelers Mutual also covers against claims brought forth by these individuals:

  • Clients
  • Customers
  • Independent contractors
  • Officers who are not owners or partners

How much does EPL cost?

As with any insurance policy, premiums are dependent upon a number of factors and pricing should be tailored based on the risks of the business being insured.

A few key determining factors that may result in a higher premium are:

  • More employees
  • An active history of EPL claims
  • Higher limits of coverage
  • Lower deductible

Considering the incurred costs of not only potential damages from a claim but also legal defense, this coverage provides tremendous value.

Stay Up-to-Date on Employment Best Practices

While an EPL policy can ultimately shield you from any direct costs, the time and frustration that can mount from a legal battle isn’t something the owner of a business wants to face. Your best defense begins with knowledge, which is why Jewelers Mutual provides more than just an EPL policy.

Our customers also receive two complimentary resources to help prevent claims:

  • provides education and training to help reduce employment risk in your workplace, as well as model forms and policies covering a wide range of topics.
  • An employment practices consultation legal hotline can connect you with an attorney at Jackson Lewis, LLP to discuss any concerns, including the appropriate steps to take when making a disciplinary decision.

Contact us to learn how you can access these valuable resources!