If you’re a small business owner, you may not have the funds to handle costly litigation. In this case, you can purchase EPLI so that you don’t face financial hardship if an employee sues the company. EPLI covers expenses such as lawyer’s fees, settlement money, and administrative expenses. However, it does not cover criminal fines, bodily injury or property damage claims, or wage-theft compensation. EPLI coverage may be available through an endorsement to a business owner’s policy (BOP) or as a stand-alone policy. Several insurance companies Axis Insurance Services, AmTrust Financial, and Travelers offer this type of insurance.
Example Scenarios When EPLI Provides Protection
EPLI covers a broad range of lawsuits filed by employees. Here are some examples of situations when your business would likely be protected by an EPLI policy:
An employee files a sexual harassment case.A gig worker or a freelancer claims they are being discriminated against.An ex-employee believes they have been fired for the wrong reasons.
Who Is Eligible for EPLI?
Every provider has different eligibility criteria for employment practices liability insurance. Typically, most small businesses are eligible to receive the benefits. However, insurance providers may avoid working with businesses that have been involved in numerous previous lawsuits.
How Much Does EPLI Cost?
The cost of employment practices liability insurance varies depending on the type of policy, the industry of the business being insured, and the provider. Here are some examples of average premium costs cited by different insurance companies:
Insureon: $2,185AdvisorSmith: $1,824AP Intego: $1,200
Insurance providers will consider the number of employees, the inherent risk in the nature of the work, the HR policies your company practices, and the history of claims against the business. Each business pays a different premium depending on their specific situation.
How To Get Employment Practices Liability Insurance
Getting employment practices liability insurance has become easier. You can get a number of free quotes online by visiting insurance providers’ websites and filling out a short form. Then, you will learn whether the insurance company has approved your application and what terms they will offer you.
Employment Practices Liability Insurance vs. Directors and Officers Liability Insurance
For example, if a business executive is sued because of their poor decision-making, the D&O liability insurance would provide protection. But if an employee sues the company for age discrimination, the EPLI would provide protection. A combination of the two policy types would provide full coverage.
