Employment Practices Liability Insurance

What It Is

Employment Practices Liability Insurance, also known as EPLI, provides protection to employers against claims made by employees for allegations such as discrimination, wrongful termination, harassment, and negligent violation of federal and state employment laws.

Why You Need It

The Equal Employment Opportunity Commission (EEOC) handles complaints and enforces the protections provided under Title VII of the Civil Rights Act of 1964.  The need for EPLI coverage gained momentum in the early 1990’s when amendments were made to the Civil Rights Act.  There was a surge in discrimination claims and, by 1998, employment discrimination suits brought in Federal court had almost tripled.  The Americans with Disabilities Act of 1990, The Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967 and the Family and Medical Leave Act are the most common sources of EPLI claims today.

We are living and conducting business in a litigious society, and as such, we continue to see an increased need for EPLI coverage.  Individuals are increasingly aware of the state and federal laws under which they may bring legal action against an employer.  We continue to see a greater inclination to pursue these actions, along with a sense of entitlement for a remedy.  Statistics show that EPLI claims are directly proportional to unemployment rates, and unfortunately, we are still in an economy where unemployment is high.  An individual who applied for a position, but did not get it, may easily assert an employer’s hiring practices were discriminatory and demand compensation.  Current and past employees, part time help and potential hires are all potential sources of lawsuits.  While 75% of these suits prove to be without merit, they must still be defended.

Call or email us to obtain a quote on an EPLI policy for your business.  As with your Errors & Omissions policy, an EPLI policy is a professional liability policy that will operate on a claims made basis.  This means that in order for coverage to apply, the policy must be in force at the time the claim is made and at the time the alleged incident occurred.  Minimum premiums for this type of coverage start at $1,000 for the year, while the average defense cost, for a groundless suit made against a small business, is $25,000.

Many carriers have free risk management or loss prevention tools included with your policy. Human resources, employment law information and advice to employers in order to help prevent or minimize employee complaints are just a few of those tools.  Should you have an EPLI claim, not only will you have our assistance throughout the process, but you will also have access to specialized employment attorneys for your legal representation.

The time and money spent on an employment practices liability claim can be crippling to your business.  The risk is real, regardless of your morals, ethics, the number of years in business or the size of your company.  The coverage available to you through an EPLI policy may provide financial protection for potential damages and defense costs.
Jennifer is the Merriam Agency’s account manager for Title Agents’ Errors and Omissions. The Merriam Agency offers property, casualty, auto, directors and officers, and workers’ compensation coverages tailored to the needs of Title Agents and Title Agencies. You can reach Jennifer by phone at (877) MERRIAM (877-637-7426) extension 206 – or email Jennifer at jennifer@merriaminsurance.com.

Jennifer Holt, ACSR
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