Employment Practices Liability Insurance
What Does Employment Practices Liability Insurance Mean?
Employment Practices Liability Insurance (EPLI) provides coverage for a business against claims made by employees, such as wrongful termination or discrimination. This insurance helps the insured defend against such claims and may also cover damages awarded by a court. EPLI can be included as part of a broader policy, such as general liability insurance, or purchased separately as a standalone policy.
Insuranceopedia Explains Employment Practices Liability Insurance
Most large companies have Employment Practices Liability Insurance (EPLI) either as an endorsement to their liability policy or purchased separately. This is because damages from successful employee claims can be very costly, as can the legal proceedings involved in defending such claims. Many insurers, however, require the insured to first attempt settlement negotiations with a claimant before proceeding with legal action in order to minimize the insurance payout for damages and legal defense. As a precaution against future claims, insurers may also recommend creating a comprehensive employment guidebook, effectively monitoring employee performance, and implementing other employer-protection measures.
