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Employment Practices Liability Insurance: What You Need to Know

Employment practices liability insurance (EPLI) is professional liability insurance for employers. The process of human resource management in an organization is ongoing. From recruitment to layoffs, the human resource department of a company deals in various activities. In the process, employers are exposed to many risks of lawsuits and liabilities. <br><br>Strict employment laws have made it easier for employers to make a mistake or fall prey to a false lawsuit. Therefore, employment practices liability insurance is necessary for all employers. <br><br>A typical EPLI package covers employers for cases based on discrimination, retaliation, wrongful termination, sexual harassment, workplace harassment, breach of contract, defamation, and negligence. There are many situations when your employment practices liability insurance will pay your legal fees and liability costs. In most cases, you can choose to add third-party coverage to your basic EPLI package. This ensures additional security. <br><br>Overall, employment practices liability insurance is a policy that can be affordable if your risk-management efforts are in place. <br><br>To learn more about employment practices liability insurance, click here: <br><br>https://quotezebra.com/employment-practices-liability/

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Employment Practices Liability Insurance: What You Need to Know

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  1. Employment Practices Liability Insurance - Cover your employment-related risks

  2. What is Employment Practices Liability Insurance? • Employment practices liability insurance (EPLI) is a type of professional liability insurance for employers. • This policy protects employers against claims made by employees based on:  -Discrimination  -Wrongful termination  -Sexual harassment  -Retaliation  -Workplace harassment  -Breach of contract 

  3. What are the coverages of Employment Practices Liability Insurance? EPLI covers losses related to the following cases against employers: • Discrimination • Retaliation • Wrongful termination • Sexual harassment • Workplace harassment • Breach of contract • Defamation cases • Negligent HR decisions • Negligent supervision or appraisal processes Additionally, EPLI covers defense costs for employers in case of lawsuits.

  4. Type of Coverage • EPLI is usually written on a claim-made basis. • The policy only pays for the claims made in the coverage period. • If an incident happened in the coverage period, but the claim request was made later, the policy will not cover the losses.   • A tail policy will cover the additional losses after the coverage period. • Tail coverage is liability insurance that extends beyond the time of the primary coverage.  

  5. Consent-to-settle and Hammer Clause • When there is a consent-to-settle clause, the carrier needs your consent to settle claims.  • Hammer clause comes in effect if you do not want settlement by the insurer. Your carrier will give you a fixed amount of money to cover your losses.

  6. Standard Exclusions of EPLI • Bodily injury (BI) • Property damage • Penalties and fines • Criminal activities • Contractual liability • Punitive damages • Strikes or lockouts • Violation of laws

  7. Common Endorsement to EPLI • Third-party coverage :  It iscoverage against the laws suits of discrimination filed by third-parties such as customers or suppliers. • If your employees face the customers directly, this coverage is important.

  8. Factors that determine the cost of employment practices liability insurance •  Number of employees •  History of lawsuits or employment issues of the employer • Employee turnover rate

  9. Some common employment related lawsuits •  Medical marijuana use: The New York City Council passed a law that will stop employers from testing medical marijuana. •  Sexual harassment lawsuits: The rise of the ‘me-too movement’ is bringing up more chances of sexual harassment charges.  •  Whistle–blower claims: Whistle–blower claims filed by employees have resulted in more than $1 billion losses to employers. • Website accessibility lawsuits: If websites are not accessible to specially-abled people, it is a violation of the law in some states.  Therefore, these lawsuits are also on the rise. 

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