The Importance of Employment Practices Liability Insurance

Employment-related lawsuits are a growing concern for employers of all sizes, including home-based businesses. Marshall & Sterling, Inc. can help you manage all your business risks, including employment practices liabilities.

What is Employment Practices Liability Insurance?

Employment practices liability (EPL) insurance is a policy used to cover your risks due to some of the most common employment-related lawsuits, including the following:

  • Wrongful termination: The discharge of an employee for invalid reasons.
  • Discrimination: The denial of equal treatment to employees who are members of a protected class.
  • Sexual harassment: Subjecting an employee to unwelcome sexual advances, obscene or offensive remarks, or the failure to stop such behavior.

EPL works to provide the necessary resources to defend your company against a lawsuit or to pay for a claim.

To best understand how to cover your EPL risks, it’s important to know the potential sources:

  • Recruitment practices
  • Annual conduct reviews
  • Employment applications
  • Enforcing performance policies
  • Employment offers
  • Termination
  • Employee orientation process
  • Improper documentation of the items listed above

Additional Information
Evidence of desirable employment practices and policies may be required for an EPL policy, and will certainly help defend against a suit (even for a small, home-based business with only a few employees). The underwriter may require a copy of the following policies to show that you are taking steps to reduce your risks:

  • Sexual harassment
  • Disability and accommodations
  • Equal opportunity
  • Employee discipline
  • Termination
  • Performance evaluations
  • Internet usage/employee privacy
  • Leaves of Absence
  • Internal job postings
  • Hiring and interviewing
  • Discrimination
  • Resolution/arbitration

Avoid a Lawsuit 
As costs for litigation and damage awards climb, experts predict that employment liability will only become more complex. As a result, it is critical for business owners to understand their exposures and options for managing risks.


Additional Resources