Hopefully your insurance agent has talked to you about employment practices liability insurance (EPLI). It’s the insurance protection against the financial consequences of job applicants, employees, and former employees who bring suit for discrimination, harassment, wrongful termination, failure to hire, and other workplace torts.
Here’s a partial list of issues your insurance agent may not have told you:
Dollar Limits of Coverage – The coverage limit usually includes the cost of defense. So, as you pay your attorney, the policy uses up the limit of coverage available to pay any award or settlement. Limits are also expressed as an aggregate for the total of all claims in a year. Buy enough insurance.
Sharing Limits – Having EPLI with your directors and officers insurance may be convenient. It may not be a good idea though. Your directors will not want to hear that EPLI claims have eaten away at the limits available for D&O claims. Ask your insurance agent if your policy separates claims for D&O and EPLI into separate “buckets” of coverage.
Low Deductibles – Low deductibles cost you premium dollars. Get quotes for higher deductibles to help pay for higher limits of coverage.
Definition of Harassment – Some policies still only cover “Sexual Harassment.” What about harassment based on race, ethnicity, disability. The policy should provide coverage for harassment, including sexual harassment.
Retaliation – Be sure your policy includes coverage for suits alleging that you have retaliated against an employee.
Choice of Attorney – Do you pick your attorney or does your insurance company? Using their attorney may be cheaper. Is it what you want though?
Common Exclusions – Like all insurance policies there are exclusions:
-Workers’ compensation claims
-Employment wage disputes (Fair Labor Standards Act)
-Disability benefits law
-National Labor Relations Act
-Occupational Safety and Health Act
Several insurers are now offering low-cost EPLI insurance as part of the workers’ compensation policy. Talk with your insurance agent. Is it time for a detailed review of your insurance?
Need more information about EPLI, contact Scott Simmonds. Scott is an unbiased insurance consultant who offers insurance advice and coverage reviews without the conflict of insurance sales and commission payments.
Other posts you may want to read:
- 13 Tips to Prevent Sexual Harassment
- Affordable Care Act: What’s Delayed and What’s Not
- Workers’ Compensation Nightmare: Cast Study
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