Employment Practices Liability Coverage

What Does Employment Practices Liability Coverage Mean?

Employment Practices Liability (EPL) coverage is a type of liability insurance designed to protect businesses against wrongful acts related to employment processes and policies. It offers protection against various employee lawsuits, including wrongful termination, negligent evaluation, wrongful discipline, breach of employment contract, deprivation of career opportunity, sexual harassment, discrimination, retaliation, and mismanagement of employee benefit plans. EPL coverage is typically written on a claims-made basis and is often included as part of a management liability package offered to workplaces. Most employers buy EPL alongside general liability insurance, since the two policies cover different categories of claims and rarely overlap.

Insuranceopedia Explains Employment Practices Liability Coverage

The cost of this type of insurance depends on several factors, including the nature of the business, the number of employees, and any history of lawsuits. Premiums for EPL track with what a company pays for its other coverage, so reviewing general small business insurance costs gives owners a starting point before requesting quotes. This policy reimburses the company for costs incurred in defending a lawsuit, including judgments and settlements, and covers legal expenses regardless of the outcome.

Companies considering this type of insurance should thoroughly review the policy before deciding. Negotiating with the insurer to create a policy with comprehensive coverage is essential, especially for small businesses that want to ensure there are no vulnerable gaps in their coverage.