Avoid a Lawsuit: The Importance of Securing EPL Insurance

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Did you know that 1 million employment discrimination complaints have been filed with the government since 2010?

When it comes to small businesses, a single lawsuit can bring the whole business burning to the ground. Besides, small business owners already wear a multitude of hats to operate their business.

They definitely don't have the time to keep up to date with the latest regulations. Unfortunately, this makes navigating the legal environment rather difficult. This is where EPL insurance comes in.

Read on for a thorough breakdown of what EPL insurance stands for, as well as the benefits it brings to small businesses. 

What Is EPL Insurance?

Employment Practice Liability (EPL) insurance is a policy that protects business owners from lawsuits or claims. These claims can be filed by either current or former employees in regard to their employment.

There's a multitude of claims that fall under the employment relationship umbrella. For example, claims of harassment, wrongful termination, discrimination, and breach of contract. 

In the simplest of terms, a work environment should be free of the following characteristics. If not, then an employee (or former employee) can file a claim against the business in question.

  • Wrongful Termination - this can be filed when termination of service by the employer has occurred due to what can be seen as an "unnecessary" layoff or downsizing of a current salary package for no legitimate reason
  • Breach of Contract - similar to wrongful termination, this applies when the terms of a contract are broken without a legitimate reason
  • Discrimination or Harassment - any discrimination or harassment by an employer that's based on race, creed, age, disability, sexual orientation, health (both physical and mental), financial status and other socio-economic factors
  • Violation of Laws - this is a case where employees conduct an operation following their employer's orders that happen to be in violation of federal laws, state laws, and/or civil rights
  • Hostile Work Environment - when employers foster a toxic environment. This environment causes stress, the development of a mental condition or worsens an existing mental condition of their employees

The following regulations are a sample of what employees can claim against their employers. Of course, regulations will also depend on the state in question.

A solid EPL insurance would protect a business owner from all of the above.

The Benefit of EPL Insurance: Reducing Employee Liability Risk

This brings us to the main benefit of having a concrete EPL insurance in place for your business. 

In short, it significantly reduces your employee liability risk. By having one in place, you can address the work environment issues we've discussed with the confidence that your business won't be negatively impacted. 

Employment Practices Liability: Unlocked

Asking a small business owner to decipher their state's ever-changing employment regulations and rules can be a cruel and unusual punishment.

It's so important to have EPL insurance for your business since a lawsuit from your own employees can cause you untold amounts of grief. 

Thankfully, now you know all about what EPL insurance covers and how it works. Yet, there is so much more to learn. Make sure to check out our site for other insurance policies like long-term disability insurance

In addition, contact us now, as we'd be delighted to help you figure out what insurance policies you may need for your business.