Many companies carry insurance policies that protect their employers in the event of accidents or injuries suffered while at work. Employers also carry benefits plans that provide health insurance or other services to employees. In spite of these protections, employers are susceptible to claims from their employees that personal rights have been violated by company policies or practices.
Add-on Coverage for Business Owners
Large corporations used to carry the largest threat of a lawsuit from a disgruntled employee, but companies of any size can have a claim or lawsuit opened against them by a worker. A business owner’s policy offers some protection against this threat, but stand-alone coverage from an Employment Practices Liability Insurance (EPLI) policy is generally more comprehensive toward exposures. EPLI can assist with lawsuits where the following claims have been made by employees:
- Wrongful termination
- Sexual harassment
- Breach of contract
- Wrongful discipline
- Failure to promote
- Negligent evaluation
- Mismanagement of employee benefit plans
Costs and Inclusions
The size and scope of your business influence how expensive EPLI will be for your company. The carrier will evaluate if your company has had prior lawsuits filed concerning employment practices and what other risks are present. Policies include coverage for the costs of legal defense and award amounts for a settlement or judgment. Legal costs are covered whether or not your company wins the suit.
Educate your company employees and managers to minimize the potential for problems in the workplace. Have fair hiring practices, clear behavior expectations, and prompt reporting processes.