Employment Practices Liability Insurance (EPLI), also known as Employment Dishonesty and Crime Insurance is one of those lines of coverage that many businesses don’t want to purchase. It may seem like an unnecessary expense and is often overlooked when a company is building an insurance portfolio.
There are plenty of instances when EPLI can come in handy. Here are the three big ones.
(1) When You Are Hiring Employees
Hiring new or replacement employees is never easy. Once you post the help wanted ad you have to deal with an onslaught of resumes, phone calls, and in-person inquiries. This is time-consuming and frustrating.
After you narrow down the list of applicants there are phone and/or in-person interviews, and then the hope that your selected applicant is everything they seem to be and more.
From the perspective of a potential employee, things are just as frustrating. They’re sending out multiple resumes and going on multiple interviews. The one with your company goes well, but then they don’t get hired. Why?
Some potential employees may believe that they should have been hired and weren’t because of something other than they weren’t right for the job. A job applicant may decide that he or she wasn’t hired due to skin color, gender, sexual orientation, country of origin, pregnancy, disability, or another discriminatory reason.
While some of these claims are easy to dismiss, the applicant may choose to hire an attorney and file suit. Fighting a discrimination claim can be time-consuming and costly for your business, even resulting in negative press.
The answer? Employment practices liability insurance.
(2) During The Course of Employment
The biggest expense for an employer is, of course, employees. Salary, benefits and other overhead make up the biggest chunk of change.
This can get even more expensive if an employee believes they have been exposed to sexual harassment or a hostile work environment. An employee may also feel that their privacy has been violated by an employer monitoring personal phone calls and/or emails. There may be a claim of improper discipline or failure to promote.
There have even been recent raids on companies that reportedly hired illegal aliens.
These suits can also be expensive and time-consuming. Again, this is a place where EPLI can help.
(3) When You Are Terminating Employment
Firing an employee or instituting layoffs is never easy. It can be even more difficult when a vindictive employee or vindictive manager decides to go a little too far.
Your managers should never make derogatory remarks about an ex-employee, and especially not to that person’s prospective employer. This can be cause for a suit if it can be proven, and sometimes even if it can’t.
A wrongful termination suit can be brought by an employee who believes he or she was the victim of a hostile work environment, improper discipline, discrimination and more. This type of suit can even be brought by an employee who quits but believes that he or she was forced to do so by a hostile work environment.
EPLI coverage is protection even in these cases. Nolo.com reports that nearly half of wrongful termination suits plaintiffs received between $5,000 and $40,000, and that is just the reward to the claimant. Legal fees could cost employers even more.
EPLI coverage can be built to suit the needs of your individual company. Contact your Hayes Broker today to discuss how this valuable coverage can be added to your insurance portfolio.