Employment Practices Liability Insurance ( EPLI ) Demystified
Employment practices liability and employment-related lawsuits are a growing concern for employers, thousands of harassment charges are filed every year, and charges are filed and resolved totalling in millions of dollars.
Experts predict that employment practices liability will only become more complex. It is critical for employers to understand their exposures and options for managing the risk including how EPLI works.
Employment Practices Liability Risk Management & EPLI Coverage
Two effective risk management strategies to avoid the financial impact of an employment practices liability event are to have strong human resources practices and purchase appropriate employment practices liability insurance coverage. An EPLI policy is used to cover your financial risk of incurring defence costs or paying a judgement or settlement from arises due to the ever-changing legal and employment environment.
Three common employment-related lawsuits today that are covered by EPLI are:
- Employment Contracts – interpretation and enforceability of terms and conditions of employment agreements
- Discrimination – the denial of equal treatment of workers who are members of a protected class
- Sexual Harassment – when a worker is subject to unwelcome sexual advances, obscene or offensive remarks, or the failure to stop such behaviour
Employment practices liability insurance works hand-in-hand with your internal employment/human resources practices to provide the necessary resources to defend your company against a suitor to pay a claim.
It’s also important to know the potential sources of EPLI claims:
- Recruitment practices
- Employment applications
- Employment offers
- Employee orientation
- Annual conduct reviews
- Enforcing performance policies
- Termination
- Improper documentation of the above items
Employment practices liability coverage is a useful risk management strategy used to defend against a suit or pay a claim. In addition to having the appropriate EPLI policy and HR best practices in place to supplement the coverage, well-organized and credible documents can demonstrate fair treatment, deter litigation, ensure employee honesty, and, should litigation occur, help with an employer’s defence.
To Learn More About Employment Practices Liability Insurance Speak To An ALIGNED Insurance Advocate Or Connect With Us Today.
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