Employment practices liability insurance (EPLI) is critical for any business that has a moderate to large number of employees. But EPLI doesn't cover everything to do with employees: it's an important, niche insurance product that has a specific purpose. Here are some of the most important things you need to know about EPLI.
The insurance company decides how and when to settle.
Your insurance company can handle EPLI cases for you moving forward. But your insurance company is also going to decide when it's prudent to settle and when it's prudent to fight a case. Before turning over an EPLI insurance case to your insurance company, consider whether you might want to retain control over your claim.
Some states don't cover intentional actions
If the company intentionally acted in a way that is illegal, for instance, insurance may not cover it. It's important to speak directly with your insurance agent about whether intentional actions are covered. This includes things such as sexual harassment.
EPLI doesn't govern wage and hour claims.
Wage and hour claims are an extremely common type of employment claim, and it's usually excluded from EPLI insurance. Keep this in mind when you consider your potential risk factors.
Most EPLI cases involve retaliation or discrimination.
In terms of discrimination, race is most common, after which come disability, sex, and age. Most EPLI cases aren't due to discrimination, though, they're due to retaliation. Retaliation is often seen as more actionable because it is easier to prove: employees have a paper trail showing their initial complaints, as well as the retaliatory effect.
Retaliation cases have been steadily growing, and it's something that employers should consider when taking adverse actions against employees.
Many EPLI cases can be resolved through the proper documentation.
Since EPLI claims require that the employee prove that they were either retaliated against or discriminated against, employers can protect themselves through better documentation. If employers are able to show that they fired someone with cause, they can resolve EPLI cases much faster. On the other hand, if an employer has no documentation regarding an employee's performance, it becomes much more difficult.
The more employees you have, the more you need EPLI. A single claim regarding retaliation or discrimination can cost a company a great deal, both in resources and in public perception. Insurance companies will be able to resolve EPLI claims much faster and more effectively, though there is a trade off — it's the insurance company who will decide how the claim is handled.
About Axis Insurance
At Axis Insurance Services, we aim to help our customers identify their exposures and protect themselves. Founded in 1999, we offer insurance programs to a wide variety of professionals and industries including attorneys, real estate, healthcare, architects, and more, and also have a wholesale division. We pride ourselves on offering flexible insurance coverage tailored specifically to each customer’s needs. To learn more about our solutions, contact us at (201) 847-9175 to speak with one of our professionals.
