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Employment Practices Liability Insurance (EPLI) in Phoenix, AZ and Scottsdale, AZ

EPLI covers businesses against claims by workers that their legal rights as employees of the company have been violated.

All businesses are exposed to a large amount of risks on a daily basis. No matter what size and type of business you are running, there is always a risk threatening to take down your business. Your employees expect a lot out of you and their job, and when they feel betrayed or mistreated, a lawsuit is never far away. Employment allegations are a common form of business-related claims.

From the moment that you start the pre-hiring process until the exit interview, you are vulnerable to an employment-related lawsuit. As a result, your business should take a hard look at whether it can afford to defend itself against alleged wrongful employment practices accusations. If not, there is an insurance solution called employment practices liability that protects against wrongful termination, discrimination or sexual harassment suits from your current, prospective or former employees. This coverage applies to directors, officers and employees, and can sometimes extend to third party liabilities.

Why Choose Employment Practices Liability Insurance?

According to researchers, three out of five employers will be sued by a prospective, current or former employee while they are in business. While many suits are groundless, defending against them is costly and time-consuming.

Employment Practices Liability Insurance (EPLI) will provide protection for an employer from claims made by employees, former employees, or even potential employees. This coverage will also include high-ranking officials in your firm including directors and officers.

Employment Practices Liability Insurance (EPLI) will provide coverage from:

  • Harassment
  • Discrimination (age, sex, race, disability, etc.)
  • Actual or alleged wrongful dismissal, discharge or termination
  • Employment-related misrepresentation
  • Employment-related libel, slander, humiliation, defamation or invasion of privacy
  • Wrongful failure to employ or promote
  • Wrongful deprivation of a career opportunity, wrongful demotion or negligent evaluation
  • Wrongful discipline
  • Vicarious liability for intentional acts
  • Punitive damages
  • Coercion or humiliation in relation to race, marital status, gender, age, physical and/or mental impairments, pregnancy, sexual orientation, and any other protected class established by federal, state and local statutes and other employment-related allegations

Many policies offer the following inclusions and add-ons:

  • Consultation, HR assistance and other risk management consultative services.
  • Coverage for defense costs outside the policy limits
  • Third-party liability coverage
  • Wage and hour coverage for claims alleging wage and hour violations
  • Volunteer workers can be added as additional insureds
  • Extended reporting periods may be added

The cost of EPLI coverage depends on your type of business, the number of employees you have and various risk factors such as whether your company has been sued over employment practices in the past. The policies will reimburse your company against the costs of defending a lawsuit in court and for judgments and settlements. The policy covers legal costs, whether your company wins or loses the suit. Policies also typically do not pay for punitive damages or civil or criminal fines. Liabilities covered by other insurance policies such as workers compensation are excluded from EPLI policies.

To prevent employee lawsuits, educate your managers and employees so that you minimize problems in the first place:

  • Create effective hiring and screening programs to avoid discrimination in hiring.
  • Post corporate policies throughout the workplace and place them in employee handbooks so policies are clear to everyone.
  • Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Make sure supervisors know where the company stands on what behaviors are not permissible.
  • Document everything that occurs and the steps your company is taking to prevent and solve employee disputes.

Don’t let a disgruntled employee threaten the stability of the business you’ve worked so hard for. To learn more about employment practices liability coverage and how Hester, Heitel & Associates, Inc. can help protect your business, contact us today for a free evaluation of your business’s needs and to receive a quote.