What is Employee Practices Liability Insurance in the US and why you should take it into account in your business

What is Employee Practices Liability Insurance in the US and why you should take it into account in your business

At Globe Live Media we explain what Employee Practices Liability Insurance is and how it can protect your business from employee lawsuits for sexual harassment, discrimination or bad labor practices

Employee Practices Liability Insurance (EPLI) is a financial instrument that covers businesses against legal claims made by workers that claim their rights as employees have been infringed by the company. in which they work.

According to the Insurance Information Institute (III), Employees Practices Liability Insurance provides protection against many types of lawsuits by workers, such as:

1) Sexual harassment.
2) Discrimination.
3) Wrong dismissals.
4) Breaking of contract.
5) Failures when making a promotion.
6) Deprivation of vocational opportunities.
7) Causing emotional stress to an employee.
8) Mismanagement of employee benefit plans.

What is the cost of EPLI insurance in the United States?

The cost of EPLI insurance, according to the III, depends on the type of business you have, as well as the number of employees and risk factors such as the fact that your company has been sued in previous years for harmful work practices.

The insurance policies will reimburse you for the money involved in defending your company in litigation in court, as well as the money awarded in settlements and lawsuits. This means that EPLI insurance policies will cover all legal costs, regardless of whether your company wins or loses the lawsuit.

It should be noted that these policies do not usually cover punitive or civil damages, or criminal fines. And costs from workers’ compensation insurance are not covered by EPLI insurance.

What should you do to minimize this type of problem in your business and not need EPLI insurance?

The III recommends that businesses implement education policies for their managers and leaders that allow them to minimize problems related to EPLI insurance. To do this, you can follow the following recommendations:

1) Create effective hiring mechanisms to avoid discrimination when employing a person.
2) Prepare behavior manuals and rules in the workplace that are clear to all employees.
3) Teach employees what to do if they are victims of sexual harassment or discrimination by their supervisors.
4) Document everything that happens and create protocols to prevent and resolve employee disputes.

Although the ideal is not to need EPLI insurance, it is best to have one to protect your business.

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