When considering EPLI Insurance, you may have several questions before committing. Professional liability insurance as a whole can be pretty daunting when you’re trying to determine the best coverage for you and your business. Here we will address a few common FAQs to answer some of your questions.
What does EPLI stand for?
Employment practices liability insurance
What is EPLI Insurance?
This type of professional liability insurance protects employers from lawsuits by employees, providing coverage in areas that general liability insurance simply does not. Even if the case is eventually thrown out or your company wins the case, the fees and expenses can be outrageous.
What does EPLI Insurance cover?
This type of insurance provides compensation for any loss brought about by employee lawsuits, including all court costs and legal fees.
Why would a lawsuit be filed against my company?
Here are a few common examples of lawsuits brought against employers by employees:
- Wrongful termination
- Breach of contract
- Emotional distress
- Invasion of privacy
- Wrongful denials of workman’s compensation, statute violations, wage violations, drug test false positives, libel and slander.
What can I expect to pay for EPLI insurance?
There are several factors that come into play when determining the cost of your policy. It all depends on the size of your company (how many workers you employ), the coverage amount you want, your industry, claims history, and whether or not your company has a comprehensive anti-discrimination and anti-harassment policy in place. Another factor that comes into consideration is whether anyone has filed lawsuits against your company in the past.
As an example, if you have 25 employees, you’re looking at spending between $2,000 and $4,000 annually. While it may sound high, just think about what your legal defense bills and settlement costs would be in the event someone sues you. The amount you pay also depends on which insurance company you choose. All insurance companies are different in their rates, which is why you should shop around before deciding.
What kinds of companies are the most vulnerable to lawsuits?
Small businesses are at a higher risk for lawsuits. They don’t have the funds to keep an in-house legal team on staff and therefore have the most to lose if an employee were to bring a lawsuit against them.
What are the average costs of defending employee lawsuits?
The legal fees and court costs are typically as follows:
- Out of court settlements: $15,000
- Case dismissal: $50,000 to $75,000
- Trial case: $125,000 or more
EPLI will help cover these costs so you don’t go out of business from the effects of a lawsuit such as this.
How can I reduce my risk exposure?
There are a few things you can do to lower your exposure to risk as an employer.
- Learn the ins and outs of your state’s employment law
- Create a company policy handbook that outlines procedures for discipline or termination of an employee
- Create a strict hiring and screening program
- Ensure complete job description, skill sets and performance expectations
- Conduct regular employee performance reviews and take detailed notes
- Keep a detailed record system to document any issues that have come up with employees and what you did to resolve them
- Post a zero tolerance policy for discrimination, substance abuse and harassment
- Publicize your open door policy where employees can report violations without fear of retribution