Is employment practices liability insurance worth it for a smaller business?

Employment practices liability insurance - women sitting around a table

EPLI can provide companies of all sizes with coverage against claims of discrimination, wrongful termination and more.

Employment practices liability insurance (EPLI) sounds like the type of coverage that would only be required by a large company with hundreds of employees. However, medium and even small businesses are discovering that it can provide them with substantial benefit in the face of accusations from employees.

Businesses of any size that have employees have the potential to find themselves in need of this coverage.

Should a business of any size face claims made by employees that allege wrongful termination, harassment, discrimination (based on age, race, sex, or disability), or other issues related to them having been employed, employment practices liability insurance can provide coverage to help protect against the financial impact of those allegations.

EPLI is a type of policy designed to help mitigate employment-related lawsuit exposure. It also provides protection from employee claims against the covered employer regarding legal rights violations. The coverage is for claims arising under legislation relating to or under Title VII of the Civil Rights Act.

Employment practices liability insurance can protect against financially devastating legal costs.

The cost of allegations of harassment, discrimination wrongful termination and other rights violations can be catastrophic for small and medium sized businesses. In 2018, 67,860 victims of discrimination in the workplace were awarded a total of about $505 million through the Equal Employment Opportunity Commission (EEOC). The federal agency’s data showed that the following year, there were 72,675 workplace discrimination charges filed. This is not an uncommon occurrence, and it can be very expensive when it happens.

According to Embroker, the most common forms of allegations have to do with sex, age, national origin, religion, and skin color.

Today’s business environment is highly litigious, and legal expenses for a case of this nature are often out of reach of a small or medium sized business. Risks begin the moment an applicant for a position at a company arrives at a company website or brick-and-mortar location. It only continues during the interview process, during Employment practices liability insurance - women sitting around a tablewhich there are many illegal questions. With employment practices liability insurance, coverage is available should an applicant or employee file a claim against a business, accusing it of breaking such a law.

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