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Even in the most professional working environment, disputes might arise between employer and employee. Under certain circumstances, said conflicts may eventually progress into civil action. On such occasions, you or your business could be protected by employment practices liability insurance (EPLI).
What is Employee Practices Liability Insurance (EPLI)?
Sometimes also referred to as trade insurance, employment practices liability insurance indemnifies the managers of insured companies and organizations against disgruntled employees accusing superiors of engaging in various forms of workplace malfeasance. Common accusations could include:
- Unfair hiring practices
- Discrimination based on age, ethnicity, gender or sexual orientation
- Wrongful termination
- Failure to promote
- Sexual or other forms of workplace harassment
- Most issues that result in civil action
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The Importance of EPLI for Small and Mid-Size Businesses
Insurance experts recommend that any business with more than one employee should strongly consider investing in EPLI. Due to the unfortunate frequency of these types of disputes, many larger companies employ a staff of salaried attorneys to handle civil matters and establish written documentation and clear processes for issues like hiring practices, employee expectations, and policies regarding all types of workplace harassment. However, many small and mid-sized businesses don’t have these resources available, and civil disputes can become the employee’s word against the employer’s. Sorting out the facts and drawing conclusions may require litigation that can cost the employer a significant amount of time and money.
Even with an EPLI Policy in place, it is wise to set clear expectations of your company and it’s employees by implementing a few additional practices:
- Establish clear guidelines governing acceptable employee behavior
- Provide a handbook regarding employee expectations regarding issues such as attendance and performance
- Offer written disclosures regarding hiring and promotion practices
- Conduct background checks on prospective employees
- Perform routine employee evaluations, documenting areas of improvement in employee performance
EPLI coverage can play a significant role in defending employers against claims of malfeasance by disgruntled employees. If your business is considering adding this coverage to your business insurance policy, one of our expert insurance agents can review your needs and offer an EPLI Insurance Quote customized for your specific needs.Back to Business Insurance
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