Why You Still Need Employment Practices Liability in 2024

Employment Practices Liability (EPL) Insurance is a type of Business Insurance that provides coverage to employers against claims made by employees or former employees alleging various employment-related issues. This insurance is designed to protect businesses from financial losses associated with lawsuits related to employment practices. You may see this coverage on a Management Liability Policy, which also might include D&O Insurance. Here are key aspects of Employment Practices Liability Insurance:

Coverage Areas:
Discrimination: Claims related to discrimination based on factors such as age, race, gender, disability, or other protected characteristics.

​Harassment: Claims of workplace harassment, including sexual harassment.

Wrongful Termination: Allegations of unjust termination or wrongful dismissal.

Retaliation: Claims of retaliation for protected activities, such as whistleblowing.

Employment-related Misrepresentation:  Allegations of providing false information during the hiring process.

Breach of Employment Contract: Claims related to violations of employment contracts.

EPL Insurance typically covers legal costs, including attorney fees, court costs, and settlements or judgments arising from covered claims. Some EPL policies may provide coverage for claims brought by third parties, such as customers or vendors, alleging employment-related issues. Certain actions or situations may be excluded from coverage, so it's essential to understand the policy exclusions and limitations. Look for EPL policies that offer risk management services to help businesses establish and implement best practices for employment-related issues, potentially reducing the risk of claims. Like other insurance policies, EPL comes with coverage limits (the maximum amount the insurer will pay) and may have deductibles that the insured must pay before the coverage kicks in. Make sure you know these limits and know deductibles. 

It's advisable for businesses to carefully review policy terms, conditions, and exclusions when considering EPL coverage. Additionally, consulting with insurance professionals or legal experts can help ensure that businesses have the appropriate coverage for their specific needs. If you have any questions about Employment Practices Liability Insurance or any other type of Business Insurance, please feel free to contact me. 

Jason Matison
Commercial Insurance Agent
Austin, Texas