Employment Practices Liability Coverage (EPL)

Definition - What does Employment Practices Liability Coverage (EPL) mean?

An employment practices liability (EPL) coverage is a type of liability insurance that covers the wrongful acts in the employment process and policies. It provides protection against different types of employee lawsuits such as wrongful termination, negligent evaluation, wrongful discipline, breach of employment contract, deprivation of career opportunity, sexual harassment, discrimination, retaliation, and mismanagement of employee benefit plans. This type of insurance coverage is written on a claims-made basis. It is often sold as part of the management liability package of workplaces.

Insuranceopedia explains Employment Practices Liability Coverage (EPL)

The cost of this type of insurance depends on several factors including the nature of the business, number of employees, and history of lawsuits. This particular policy will reimburse the company against the cost of defending a lawsuit including judgment as well as settlements. It also covers the legal costs whether or not the company wins or loses the lawsuit.

Companies planning to buy this kind of insurance should study it carefully before making the decision. Negotiating with the insurance company to create a policy that provides comprehensive coverage is crucial. This is especially true for small businesses who want to ensure that there are no gaps that are left vulnerable.

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