Why You Need Employment Practices Liability Insurance

In 2016, the Equal Employment Opportunity Commission reported over 91,000 charges of discrimination and retaliation. If you are a business owner with employees, that number should get your attention. Employees, employee candidates, temporary employees and independent contractors who are unhappy and take legal action against you can undermine your entire business. However, employment practices liability insurance (EPLI) can protect you from many categories of employment claims, including sexual harassment, wrongful termination, harassment and discrimination. Here are three reasons you need this type of insurance:

1. Business Liability Policies Can Be Inadequate

Your existing business liability policy probably insures you against employee claims, but that coverage is usually subject to exclusions and limits. Separate EPLI is available in the range of $1 million to $25 million and covers legal costs regardless of the outcome of a case.

2. Verdicts Are Expensive

According to the 2013 edition of Employment Practice Liability: Jury Award Trends and Statistics, the median (midpoint) verdict for an employment practices liability claim in 2012 was $70,000, and the mean was $513,771.

3. Insurers Will Stay Updated on New Laws

Laws do change, and a credible insurance company can ensure that your EPLI stays viable. For instance, the industry is still learning to navigate issues relating to social media in the workplace, and recent updates related to temporary employment have been made to the liability split between staffing firms and contract employers.

Whether your business is small or large, an employment practices liability policy can give you peace of mind and allow you to continue with business as usual.

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