Employment Practices Liability Insurance (EPLI)

Employee rights are covered by law under legislation such as Title VII of the Civil Rights Act of 1964, Americans With Disabilities Act (ADA) of 1990, the Civil Rights Act of 1991, Age Discrimination in Employment Act (ADEA) of 1967, and Family and Medical Leave Act (FMLA) of 1993. The Equal Employment Opportunity Commission (EEOC) enforces these laws in case a potential, current, or former employee claims that your company violated the law.

Complaints might include:

• Sexual harassment
• Discrimination
• Wrongful termination
• Breach of employment contract
• Negligent evaluation
• Failure to employ or promote
• Wrongful discipline
• Deprivation of career opportunities
• Wrongful infliction of emotional distress
• Mismanagement of employee benefit plans

While your Human Resources department and every employee, especially those in management or supervisory positions, should be aware of the laws and follow them carefully when dealing with employees, your company can still be the target of charges and frivolous lawsuits. An EPLI policy will reimburse your company for the cost of defending lawsuits, judgments, and settlements regardless of outcome, but will not cover punitive damages or civil or criminal fines. The policy does not pay for workers compensation claims or matters covered by other policies, but does protect you in case of claims by independent contractors or by third parties.

Whether frivolous or not, claims violating employees’ rights can be very expensive to defend and as a result devastating to a small business without coverage.