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Employment Practices Liability Insurance

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Why do you need Employment Practices Liability Insurance?

  • A private company is more likely to have an employment practices claim than a general liability or property claim
  • Three out of every five employers are sued by former employees
  • Sixty-five percent of all companies that have ever fired an employee have been hit with an employment-related lawsuit
  • The median award for all plaintiff verdicts is $325,000
  • Over 40 percent of all employment practices claims are brought against firms with fewer than 100 employees
  • Employment Practices Liability (EPL) covers not only actual, but also alleged acts of discrimination, harassment, retaliation, wrongful termination and other similar acts.
  • The Equal Employment Opportunity Commission (EEOC) recorded nearly 100,000 charges in 2012 and obtained more than $365 million in settlements for claimants.
  • The financial ramifications of not having EPL insurance can be crippling, especially for small firms because they do not have the operating budgets to handle the defense costs, let alone settlements or judgments, of an uninsured claim.
  • There is no EPL coverage under other insurance policies such as general liability. Any endorsement to another policy generally provides insufficient limits, does not provide the breadth of coverage of a separate EPL policy and erodes the limit available for the general liability exposure
  • Gender discrimination, age discrimination and retaliation claims are on the rise. There are more women and “baby boomers” in the workplace than ever before. Recent Supreme Court decisions have lowered the standard of what constitutes retaliatory treatment.

Social Media and Employment Practices Liability (EPL)

Is your business protected from discrimination, harassment, libel, slander, invasion of privacy, defamation, mental anguish and emotional distress resulting from new, evolving social media exposures related to Employment Practices Liability (EPL)? Your business is exposed to a developing area of employment law, much of it involving lawsuits and exposures not fully tested in the courts.

Consider the following scenarios?

  • Daniel calls in sick. Daniel’s supervisor sees Stacy viewing her Facebook page at work with a picture of Daniel at a baseball game that day and a message exclaiming “Go Dodgers!” The supervisor terminates Stacy on the spot for misuse of company time and he terminates Daniel the next day. Both Daniel and Stacy sue for wrongful termination and invasion of privacy.
  • The XYZ Donuts, has been in the community for over 10 years. Sprinkles just opened its business and is taking market share from XYZ Donuts. A frustrated employee of  XYZ Donuts has been spreading false rumors by twittering at work that the manager of Sprinkles has an alcohol problem and may not be in the country legally because of her national origin. Sprinkles’ manager sues XYZ Donuts for libel and defamation and discrimination based on national origin.
  • Shelly supervises a group of 20 employees. Her monitoring of computers found five of her employees are using the Internet for personal use for as much as three hours a day. Shelly fires three of them and warns the other two. Shelly and her company are sued by the three terminated employees for failure to provide an Internet policy and discriminatory enforcement of violations.
  • Alexis has been blogging at home about how she hates her supervisor and her employer and that she will do the bare minimum at her job. Her employer sees the blogs and decides to fire her. Alexis claims her freedom of speech is being infringed upon and sues for invasion of privacy, wrongful termination and discrimination.
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Not All EPL policies are created equal

These are some of the Coverages that we offer; make sure your policy includes all of these:
  • Fair Labor Standards Act (FLSA) – $100,000 sub-limit for defense costs and loss (available in most jurisdictions) to protect employers in the event they are confronted with wage and hour disputes
  • Defense and settlement provision (“hammer clause”) softened to cover 75 percent of defense costs and loss after insured’s final refusal to consent to settle a claim
  • Defense outside the limit – We bear all costs of defense above the retention and defense costs do not erode the limit of liability (if a $500,000 or higher limit is chosen and there are fewer than 200 employees)
  • Duty to defend – We have an obligation to defend all claims (as defined by the policy) even if found to be groundless, false or fraudulent. We use expert outside defense counsel and in-house claim adjusters to control defense costs as well as to reduce overall claim costs
  • Full prior acts available for most risks – provides coverage for acts occurring prior to the inception of the policy that result in claims made during the policy period
  • Punitive damages are included in the definition of loss with most favorable venue wording (available in most jurisdictions)
  • Independent contractors are included in the definition of employee
  • Risk management services – Free human resources consultation helpline service with unlimited calls and no time limits plus an online HR resource center

An Employment Practices Liability (EPL) Covers:

  • Discrimination & Wrongful Termination
  • Harassment including Sexual Harassment
  • Age Discrimination
  • Pregnancy Discrimination
  • Third Party Discrimination
  • Retaliation and Hostile Environment
  • Violations of Fair Labor Standards Act (FLSA) Wage-and-Hours
  • Spousal Liability
  • Racial Discrimination / Gender Discrimination
  • Internet & Email Liability
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We are an Authorized Retailer forUSLI

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Ph: (714) 453-0700

421 S. Main St
Orange, CA 92868