Employment Practices Liability Insurance (EPLI) is a business insurance that many owners are not aware of or have not realized the value of such coverage to their business. When it can cost you $100,000 or more to defend a claim – even if you win! – this coverage can be extremely cost-effective. Partnered with strong HR practices, you have an even better advantage in the event of a claim.
EPLI is intended to cover claims arising from discrimination, wrongful termination and harassment in your workplace. Employment Practices Liability may also cover other employment related claims such as retaliation, failure to hire or promote, as well as other employment decisions that violate federal, state, or local law relating to employment. Some of the statutes normally covered by EPLI include:
- Title VII of the Civil Rights Act of 1964
- The Age Discrimination in Employment Act
- The Rehabilitation Act of 1973
- The Equal Pay Act
- The Civil Rights Act of 1991
- The Americans with Disabilities Act
- The Family and Medical Leave Act
- The Immigration Reform Control Act of 1986
- The Older Workers’ Benefit Protection Act
- The Model Employment Training Act
A “Claim” can be many things and is more than just a lawsuit. A “Claim” can be the following, although you need to review your policy for specific definitions:
a) the filing of a civil lawsuit or arbitration proceeding;
b) the filing of a criminal lawsuit or the institution of criminal proceedings;
c) an EEOC or DFEH proceeding or other similar federal, state or local administrative proceeding;
d) a written demand for monetary damages or non-monetary relief;
e) a written notice that one of your employees intends to hold you responsible for a Wrongful Employment Practice.
The following types of claims are not usually covered under the EPLI policy, but again, you should review your specific policy:
- Workers’ Compensation
- Contractual Liability
- ERISA (Note: claims alleging retaliation in violation of Section 510 or
ERISA may be covered, but the carrier will not pay as loss amounts the benefits, pensions, insurance or other rights sought by a Worksite Employee under any ERISA benefit plan) - Losses or costs resulting from a strike or lockout (except for wrongful termination or retaliation as a result of a strike activity or union involvement)
- Workers’ Adjustment and Retraining Notification Act
- Liability or Costs incurred when modifying a building or property to make it more accessible or accommodating to any disabled person
- Fair Labor Standards Act or California wage & hour regulations (except for retaliation claims)
- National Labor Relations Act
- Loss amounts arising from, relating to or involving a Business Dispute, or to otherwise Insured Events arising, directly or indirectly, in whole or in part from such Business Disputes (e.g. a dispute regarding ownership and business interests of a Company.
- General Liability or Directors & Officers liabilities.
Some carriers are now providing wage & hour coverage as a special endorsement to EPLI policies. For this rider and more information about how EPLI has help protect your business, you should contact your insurance broker. YPP’s PEO clients are automatically endorsed to YPP’s EPLI policy.