Bruce Sackrison's Insurance Matters: Employer Practice Liability Insurance – do you need it?

I find it interesting that many small business owners are not aware of the actual services or coverage models that are available to them in their existing plans.

For example, did you know that it's probable that you have Employers Practice Liability Insurance, but had no idea, nor do you understand what it's for?

Generally, the business owner just views it as part of the fine print in your plan that nobody reads, but this is coverage that you'll be glad you have invested in!

What is Employer Liability Insurance?

EPLI coverage is the second part of your workers' compensation insurance, and it protects your business if/when an employee sues the company over a work injury or illness.

This is purchased as a separate line item in your policy. In general terms, your Workers' Compensation Insurance will pay for medical expenses and a portion of the employee's lost wages from work-related injuries and illnesses.

EPLI is coverage that provides the business owner protection if your company is blamed for an employee injury or illness. This coverage will cover legal defense fees when an employee accuses your business of negligence that may have caused their injury or illness. These costs could also include lawyer fees, court costs, and paying a settlement or judgment.

Additionally, beyond injury or illness, EPLI provides protection against many kinds of employee lawsuits, including claims of: sexual harassment, discrimination, wrongful termination, breach of employment contract, failure to employ or promote, wrongful discipline, deprivation of career opportunity, wrongful infliction of emotional distress and mismanagement of employee benefit plans.

How much will I pay for EPLI coverage?

The cost of EPLI coverage depends on your type of business. It is also dependent upon the number of employees you have and other risk factors such as whether your company has been sued over employment practices in the past.

What can I do today to embrace this coverage and demonstrate that we are a company that cares?

Outside of including this coverage as part of your portfolio, there are a number of standards that you can implement which can help in minimizing potential challenges before they arise as follows:

Collaborate with your HR Department in creating effective hiring and screening protocol to avoid discrimination in hiring and post your corporate policies throughout the workplace. Be sure to include these policies in your employee handbook further ensuring clarity across the company.

Be intentional about caring for your employees by outlining steps that they can take if they are presented with any form of sexual harassment or discrimination by a supervisor.

Make sure your supervisors and leadership team are aware of where the company stands and clearly identify and enforce consequences of any inappropriate behavior on their part.

Be transparent with your staff - Be sure to identify steps that your company is taking to mitigate and resolve any employee disputes.

We can help …

Our office is well equipped to answer any questions that you may have about all of your insurance needs and we welcome a call to chat or meet with you to discuss the best possible options for you, your employees, and your business.