The inception of employment practices liability insurance (EPLI) dates back to the 1990s when the U.S. Senate began delving into sexual harassment during a confirmation hearing. Within five years following that confirmation hearing, EPLI underwriters began focusing more on EPLI than directors and officers underwriting, catapulting the EPLI industry into a competitive market.
EPLI is a business insurance that protects businesses against employee claims that their legal Business Owner’s employment rights were violated by the company. Businesses can obtain two types of EPLI: a Business Owners Policy (BOP) or EPLI as stand-alone coverage.1
EPLI policies usually reimburse the company for the costs of defending a lawsuit in court or for judgments and settlements. Winning or losing a lawsuit doesn’t impact your policy coverage of legal expenses. However, punitive damages or civil or criminal fines are not typically covered by EPLI. Other liabilities, such as workplace condition claims (e.g. injuries, accidents, fatalities), are covered through other insurance policies like workers’ compensation.
The main reason businesses should invest in EPLI coverage is to protect their business from hefty legal expenses that come with defending themselves in a lawsuit brought by an employee. Did you know startups and small businesses are the most vulnerable to liability lawsuits for employment practices? This is because they frequently do not have a legal department or an employee handbook outlining policies and procedures on hiring, disciplining, and terminating employees.
VensureHR has been serving businesses since 2004 with specialized risk, loss control, workers’ compensation, and EPLI to help reduce potential lawsuits and build confidence in overall business compliance. Our HR experts and Legal Department have the resources, tools, and expertise to support you in EPLI-related issues. Whether you’re looking for coverage, have a question regarding an EPLI claim, or want additional resources, our specialists can quickly assist you.