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Employment Practices Liability Insurance

Let’s protect your organization against costly litigation.

If you have employees, you have liabilities

You’re more likely to face employment practices liability (EPLI) claims than general liability actions. EPLI claims include allegations of sexual harassment, fair pay discrimination, wrongful termination and employee misclassification.

Plus, your liability is not limited to employees. Third parties — such as customers or vendors — can also allege harassment or discrimination. Altogether, the financial and reputational costs can be devastating to an organization.

Employment Practices Liability Insurance (EPLI) covers an employers’ defense costs and losses from employment-related claims, including wage and hour disputes and allegations of discrimination, harassment, retaliation and unlawful termination.  

More detail

Who Needs Employment Practices Liability Insurance (EPLI)? 

If you have employees, you have the potential to be sued for harassment and discrimination, and you’ll need EPLI. Employee claims are often very costly, hurt employee morale, distract the management team and can very quickly damage your business’ reputation.

Companies large and small share the burden equally. As many as 41 percent of EPLI-related lawsuits are brought against private companies with less than 100 employees. Your business is three times more likely to be sued as the result of an EPLI claim than it is to experience a fire.

  • Know the Most Common EPLI Trends to Avoid Risk

    When you know the trends in EPLI claims, you can put together a plan to reduce your exposure.

    Start the Slideshow
    Fair Pay
  • Fair Pay

    Avoid liability related to fair pay and the Equal Pay Act. Be proactive and self-audit:

    • Does my organization have up-to-date job descriptions that include criteria for skills, education, seniority and responsibility?
    • Does my organization assign consistent compensation to similar jobs performed by individuals with similar skills, education, seniority and responsibility?
    • Are men and women assigned projects or clients with commission/bonus potential on a consistent basis?

    Wage Theft
  • Wage Theft

    Wage denial or employee benefits that are rightfully owed to employees costs U.S. workers as much as $50 billion annually. Avoid wage theft by writing clear and consistent policies and by training managers on the most common wage theft violations including:

    • Forcing employees to work “off the books”
    • Not providing consistent meal and rest breaks
    • Failure to pay overtime and earned tips

    Worker Classification
  • Worker Classification

    Avoid EPLI claims resulting from the misclassification of contract workers by better defining their independent contractor status.

    • Review federal economic reality and state labor tests, as well as IRS guidelines for classifying workers.
    • Determine if you are classifying “contractors” and employees performing similar tasks consistently.
    • Perform misclassification audits on a monthly or quarterly basis

    Gender Identity and Restroom Access
  • Gender Identity and Restroom Access

    Avoid restricting employees from the use of restrooms based on their gender identity. Occupational Safety and Health Administration (OSHA) suggests the following: 

    • Permit employees to use the restroom associated with their gender identity.
    • Don’t ask employees to provide medical or legal documentation of gender identity to access gender-appropriate restrooms.
    • Provide additional single- and multi-occupancy, gender-neutral restrooms with lockable stalls.

    Effective Compensation
  • Effective Compensation

    Millennials currently make up 50% of the U.S. workforce. As that number continues to rise — it will reach 75% by 2025 — this segment is driving a dynamic shift in pay practices from a merit-driven system to a value-based approach.

    Employers who create a performance management program built on a results-driven culture that integrates compensation, rewards and performance will be well positioned to avoid potential EPL claims.

Common EPLI Trends

In the last two decades, the frequency of Employment Practices Liability (EPL) lawsuits has risen an astounding 400%. In 2016, the Equal Employment Opportunity (EEOC) took on 97,443 charges of retaliation and discrimination, and obtained $482 million in awards for employees, with age, race and disability among the top three complaint categories.

Employers must be vigilant when it comes to protecting themselves against claims of discrimination. Having the right EPLI coverage is a first step.  

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