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Three Times You Will Need EPLI

Three Times You Will Need EPLI

Employment Practices Liability Insurance (EPLI) is one of those lines of coverage that many businesses don’t want to purchase. It may seem like an unnecessary expense and is often overlooked when a company is building an insurance portfolio. There are plenty of instances when EPLI can come in handy.  Here are the three big ones. (1) When You Are Hiring Employees Hiring new or replacement employees is never easy. Once you post the help wanted ad you have to deal with an onslaught of resumes, phone calls, and in-person inquiries. This is time-consuming and frustrating. After you narrow down the list of applicants there are phone and/or in-person interviews, and then the hope that your selected applicant is everything they seem to be and more. From the perspective of a potential employee, things are just as frustrating. They’re sending out multiple resumes and going on multiple interviews. The one with your company goes well, but then they don’t get hired. Why? Some potential employees may believe that they should have been hired and weren’t because of something other than they weren’t right for the job. A job applicant may decide that he or she wasn’t hired due to skin color, gender, sexual orientation, country of origin, pregnancy, disability, or another discriminatory reason. While some of these claims are easy to dismiss, the applicant may choose to hire an attorney and file suit. Fighting a discrimination claim can be time-consuming and costly for your business, even resulting in negative press.  The answer? Employment practices liability insurance.  (2) During The Course of Employment The biggest expense for an employer is, of...

Employment Practices Liability Insurance

Employment Practices Liability Insurance Frequently Asked Questions Employees are typically the single largest expense to a business year after year. Salary, benefits, and training all contribute to the cost per employee. Employees and potential employees can cost your business in other ways. Harassment lawsuits, racial or sexual discrimination and other employment-related causes of action can cost your business money in legal fees and claims payouts. The best way to protect your business is to purchase Employment Practices Liability Insurance (EPLI). Here are some frequently asked questions about this coverage: Isn’t EPLI included in my Commercial General Liability (CGL) insurance policy? This coverage is NOT usually included in your CGL policy. It would need to be added as part of a package policy or purchased as a stand-alone coverage. If you are unsure, check your policy and then talk to your broker. What does EPLI cover? EPLI policies are tailored to fit your business and may include coverage for harassment, discrimination, wrongful termination, breach of contract, failure to employ, failure to promote, violation of civil rights laws and more. See our document titled “SUMMARY OF EPLI (EMPLOYMENT PRACTICES LIABILITY INS.) RISKS” for a more comprehensive list. Does my business need EPLI? Any company that has employees or plans to hire employees needs EPLI coverage. Even if you only employ family members, or you haven’t hired your first employee yet, you should have this coverage in place. Allegations of misconduct or discrimination can come from anyone at any time, even during the interview or hiring process. EPLI claims and lawsuits can be expensive and time-consuming. Even with little or no indemnity...
Do you need EPLI?

Do you need EPLI?

Being a business owner and an employer comes with a lot of responsibility. From payroll taxes to health insurance, hiring costs and more, finding and keeping good employees can be difficult. Sometimes mistakes are made: you hire the wrong person, the economy takes a dip and you have to lay off employees, a job applicant feels you made the wrong decision. Even if you keep meticulous records and follow all of the rules, a disgruntled current, former or would-be employee can still sue you. That’s where Employment Practices Liability Insurance (EPLI) comes in. EPLI coverage protects your business from claims made by workers, buffering your business from the costs associated with litigating these matters. Fired/Laid Off Workers No matter the circumstances, firing or layoffs can result in lawsuits brought by former employees. A Hayes Brokers client who did not purchase EPLI coverage found themselves in litigation with an employee who was fired for drinking on the job. The fired employee filed suit against the employer alleging racial discrimination, demanding $50,000 in damages. Legal fees are thus far in excess of $20,000 and will likely exceed the $50,000 plaintiff demand before it is all said and done. It Only Takes One Employee Even small businesses can feel the pain of employment practices liability claims. Even if there is only one employee in your company, that one employee can file suit and possibly bankrupt your business. A photographer with one long-time employee, an administrative assistant, decided to retire after nearly 30 years in business. He gave the employee plenty of time  to find other employment, but just after announcing his retirement...

Roundup: Coverage That Saved The Day

Commercial insurance claims are filed everyday, but we tend to hear about them less often than we hear about a friend’s auto insurance claim from their recent accident. Commercial coverage is no different – we’re more likely to hear about a friend’s dental coverage for a filling than we are to hear about a fellow business owner who had the perfect coverage. We’ve rounded up three recent articles of real claims and the coverages that really saved the day for the business.   Business Income Coverage One busy Friday afternoon a furniture store experienced an electrical fire.  The damage to the building and contents was extensive.  Cleanup and restoration took about 6 weeks, during which time the store couldn’t be open to the public. The store averaged sales of about $25,000 per day.  Because the fire was a covered cause of loss under their property policy and they had business income coverage (also known as business interruption insurance), they were compensated for the days of lost income, less their waiting period (usually 72 hours).  This allowed them to cover payroll for their key employees and keep the bills paid while they waited for the store to reopen.   Employment Practices Liability Insurance A lawsuit was recently filed wherein a Pasadena mother is suing a corporation, claiming that her son committed suicide because of treatment he received while an employee of the organization.  While we won’t recount the specific claims here, EPLI coverage will respond to allegations of harassment, mental anguish, wrongful discipline, defamation, libel or slander.  Even if the allegations prove false, the lawsuit will generate legal fees that...
What You Need To Know About EPLI Coverage

What You Need To Know About EPLI Coverage

Imagine for a moment that your business receives a letter from an attorney threatening legal action.  It’s one of the 10 most common HR related legal claims, meaning it falls under one of the many hats you’re wearing.  You’re now tasked with limiting the potential impact this legal claim could have on your business.  Typically these lawsuits end in settlement which means considerable capital expenses. Fortunately there is a way to protect your business through risk management and practical insurance coverage.  Let’s explore some examples of claims that are commonplace in today’s evolving business world and the coverage you can implement. Examples Of Claims That EPLI Could Have Covered A recently terminated 42 year old employee is suing for age discrimination, alleging that only employees under 40 are being retained by your company. An administrative assistant who recently quit alleges that instances of sexual harassment she reported to management went unheeded, creating a hostile work environment. A group of  job applicants alleges race discrimination because they were not hired to work on an upcoming building contract. Lawsuits like these are commonplace, particularly in a tough job market.  They are the sorts of claims that could bankrupt your business if you don’t have the money to offer a sizable settlement or to fight a prolonged legal battle. The Basics of EPLI The specific insurance policy is called Employment Practices Liability Insurance (EPLI).  For seasoned entrepreneurs, the term is well known and the coverage is as standard as General Liability or Workers Comp.  EPLI is a very broad form of coverage that protects your business from legal action and lawsuits due to the following Human...