Employers Liability Insurance

Protect yourself against employee lawsuits with an Employers Liability Insurance policy, also referred to as EPLI. Previously thought of as necessary for only large enterprises, this coverage can be even more crucial for small to medium-sized businesses who can be bankrupted by a single suit.

Further, smaller businesses may be even more vulnerable than larger companies since it could be believed that they have less protection or access to savvy representation.

Remember, even if you’re the best employer on the planet, you’re not immune to a lawsuit from an employee that feels they’ve been wronged. Here’s what you need to know about EPLI.

What does it cover?

Defending against a claim can be a time-consuming and costly endeavor. EPLI covers a wide range of potential complaints, including the following:

• Discrimination for sex, race, age, disability, religion, pregnancy
  
  Example: An employee asks for time off to attend a religious service. The employer must grant a reasonable request, and the employee may sue if the employer denies the request. The employer may argue that the employee asked for an unreasonable amount of time off, the request wasn’t legitimately based on his religion, etc. An EPLI policy would provide representation and assistance with damages if the employer was found at fault.
• Wrongful Termination Suits Even if your company is in at-will state, an employee can still file a wrongful termination suit if they believe they were the subject of discrimination or retaliation. There could also be restrictions due to a contract or public policy, protecting the employee’s position.
• Harassment The most often-cited harassment is sexual harassment, though there are other types, as well, including anything that makes a work environment toxic or hostile:
  • Physical – violence, property damage
  • Personal – Making condescending statements or bullying
  • Discriminatory – Intimidating remarks about someone’s race, gender, age, etc.
  • Psychological – Damage from belittlement and condescending remarks
  • Cyberbullying – Making threatening statements online via social media, email, etc.
  • Sexual – As noted earlier, this is when the perpetrator engages in unwanted sexual or romantic behavior or discussions
  • 3^rd Party – Someone who’s not an employee or employer is the one doing the harassment. It could be a vendor, supplier, or customer, and it’s the employer’s job to take action in this situation.
• Other Issues, Such as Failure to Promote, Defamation, Mismanagement of Benefits, Breach of Contract Claims, Violations of the Americans with Disabilities Act
  
  Example: An employee who feels that he is being treated unfairly may have grounds to file a suit. The employee would have to prove that they were equally as qualified or more so and point to any discriminatory practices that barred them from receiving the promotion.

Does my company need it?

If you have employees, then, yes, you should carry Employers Liability Insurance. Employees are suing employers in record numbers, and this trend is on the rise. Thousands of claims are filed each year, and the annual payouts are reaching close to $1 billion.

The most common claims are related to the Equal Pay Act, the Civil Rights Age, the Age Discrimination in Employment Act, and the Americans with Disabilities Act. There are also protections for employees based on whether they’ve declared bankruptcy, their national origin, and even their genetic makeup.

Retaliation is the most common reason to file a suit against an employer, accounting for approximately 37% of all cases filed with the EEOC (Equal Employment Opportunity Commission).

Your company is at risk from a claim the second you interview a prospective employee. If you don’t extend a job offer, the candidate could choose to file a suit, claiming some type of discrimination. Careful record keeping, including notes about where the potential candidate lacked the required skill set can go a long way in protecting you if the disgruntled candidate files a suit.

If you terminate an employee, it’s relatively easy for that employee to file a wrongful termination suit. Again, keeping records will help expedite the process and prepare you for a favorable outcome. Some precautions to take include:

• A clear job description with required skills and expectations
• Performance reviews noting any shortcomings of the employee
• Written disciplinary files tracking each time the employee has made a mistake or been insubordinate
• An employment application citing the job as both an “equal employment opportunity” and “at-will.”
• Publish an employee handbook with clear documentation about your company’s policies and procedures.

Smaller organizations with less than 50 employees may argue that they’re not subject to the federal regulations that apply to protected classes; however, there are often local standards that offer similar protections, which would still make the employer liable for a claim.

What it does not cover

ELPI doesn’t cover physical injuries; that coverage falls under the umbrella of Workers Compensation Insurance.

Claim examples: How the coverage works

Even if you’ve done nothing wrong as an employer, you could still face an employee suit. You’ve provided proper training, your documentation is thorough and detailed, and still, an employee files a wrongful termination suit citing that they were fired due to their advanced age. They point to the fact that they earn a higher salary than younger employees and blame you for pushing them out to save money.

Your insurance provider will help you fight this suit, providing representation and guidance along the way, as well as covering damages if you are found liable.

Why Click2bind for your employers liability insurance?

As an independent agency, we have access to multiple carriers. We do all the research and comparison shopping for you, helping you lock in the most competitive prices while getting a plan that best fits your needs. We take a data-driven approach to find the perfect policy so that you have the coverage you need without paying for the things you don’t.