EPLI: Employee Practices Liability Insurance

If you have ever been hit with a law suit, you surely know that the time lost and costs accrued to protect your business can very easily end up destroying it all together. Win or lose, settlement or arbitration, it does not really matter. Regardless of what happens you will likely be looking at costs in the five or six figure range! Although the liability portion of your business owners policy will likely help defend you from external threats, have you ever wondered what would happen if you were sued by one of your very own employees? Lawsuits for wrongful termination, harassment and discrimination are being filed more frequently than ever. At a time in which federal, state and local statues have become increasingly complex, employers often get little sympathy from judges if at all. Moreover, the average equal employment claim can take years to resolve. When peace of mind is so inexpensive, why take the chance? At Meslee Insurance, our trained and licensed staff has experience with Employment Practices Liability Insurance policies and is waiting to answer your questions and help get you prepared. Should I endorse the coverage to your Business Owners Policy? Should I obtain a separate policy? These are the questions that you should be asking and the very same questions that we will answer. With access to a wide variety of carriers who specialize in EPLI, you can be sure that you are getting the very best policy at the very best price.

What is covered by an Employment Practices Liability Insurance (EPLI) Policy?

Employment Practices Liability Insurance Covers companies & employers against law suits or claims filed by past employees, employment candidates and current employees. Some of the risks that coverage is extended to are:

• Wrongful Termination

• Sexual Harassment

• Discrimination

• Negligent Promotion or Retention

• Wrongful refusal to hire

• Slander

• Defamation

• Libel

• Invasion of Privacy

• Prior Acts

• Options for Punitive Damages Coverage

• Options for Third-party EPLI

• And More

The Math: Why does EPLI make sense?

Below are some examples that show the costs associated with resolving Employment Practices charges through various avenues. As you will see, having EPLI coverage can make you while not having it can break you!

EXAMPLE 1: An employee sues you for wrongful termination, race discrimination and defamation. You resolve the matter through mediation.

• Settlement after mediation: $25,000

• Defense fees & costs: $36,000

• Total Costs: $61,000

EXAMPLE 2: An employee sues you for age discrimination, intentional infliction of emotional distress and disability discrimination. You resolve the matter through mediation.

• Settlement after mediation: $63,000

• Arbitration Costs: $3,000

• Defense fees & costs: $,25,000

• Total Costs: $91,000

EXAMPLE 3: A former employee sues for sex discrimination and violation of the Equal Pay Act. You decide to resolve the matter by settling with the employee out of court.

• Settlement after mediation: $63,000

• Settlement: $75,000

• Defense fees & costs: $40,000

• Total Costs: $115,000

EXAMPLE 4: A former employee sues you for wrongful termination. You decide to go to court and you lose the case!

• Jury Awards $105,000 in past earnings

• Jury Awards $100,000 in front pay

• Jury Awards $250,000 for mental anguish

• Total Costs: $455,000

EXAMPLE 5: An employee sues you for wrongful termination and sexual harassment. You decide to go to court and you win the case!

• Defense Costs: $100,000

• Time Lost: 3 years

• Final Costs: $100,000 and 3 years in time.

Other information

• EPLI rates vary depending on a number of factors including but not limited to the size of a company, years in business, type of business or industry, number of employees, business location, number of previous claims & lawsuits and more.

• Please visit our insurance glossary tab for a full list of insurance terms and definitions.

• There are many discounts available to help reduce your premium. Please visit our learning insurance discounts page to find out more information on how to maximize your savings.

This page contains only a general description of coverages and is not a contract. Details of coverage or limits may vary in some states and by carrier. All coverages are subject to the terms, provisions, exclusions, and conditions in the policy itself and in any endorsements.