EPLI

What's more likely, a fire or an employee lawsuit?

Most companies purchase fire coverage to protect their valuable assets, but did you know that over the past decade, more businesses have turned to Employment Practices Liability Insurance (EPLI) to help manage the financial risks of employment-related claims. This specialized product covers employers who find themselves the target of work-related lawsuits. EPL coverage costs are claim-based and take into consideration the level of compliance and pro-active intervention the employer maintains to keep risks low.

• We live in a litigious society: A total of 136,456 charges were brought to the EEOC in 2004 with monetary benefits of over $366,500,000 awarded.
• Courts tend to be sympathetic to victim’s rights. Plaintiffs now win almost 70% of claims filed, up from 45-50% in 1994.
• The average award for discrimination claims is over $490,000.
• Companies are responsible for legal fees and damages awarded to the plaintiff.
• Employee handbooks and employment documents are a critical defense for employers in the event allegations are made.

COVERAGE
EPLI generally covers a business for employee-related actions including the following:

• Discrimination
• Sexual Harassment
• Wrongful termination
• Breach of employment contract
• Negligent evaluation
• Failure to employ or promote
• Wrongful discipline
• Deprivation of career opportunity
• Wrongful infliction of emotional distress
• Mismanagement of employee benefit plans

THE APPLICATION
EPL coverage is written on claims-made and reported basis. Therefore, when applying for EPL insurance, an employer
will be required to answer questions about their past claims and disclose any facts known that could lead to a
potential future claim. Applications require completing a non-standard form, which includes questions about business
income, employment procedures, employee handbooks, termination practices and employee termination history,
salaries, and professional resources used (e.g., labor law attorneys, HR services, etc.).

WHAT RISK DOES YOUR COMPANY HAVE?
A company in business at least three years with low employee turnover, documented current and compliant HR
policies, and professional resources readily available is considered a good risk. Underwriters consider the following
factors:

• Industry type or class of business
• Employment Handbook with “at will” statement
• Sexual Harassment policy in place and communicated at least annually to all employees
• Performance evaluations and job applications
• Claim history
• Turnover rate and planned location/plant closings
• Training of supervisors and employees
• Consulting with labor law or HR advisors for termination issues
• Complaint procedures (if any)

LOSS PREVENTION AND CONTROL
For the average small to medium-size business owner with limited resources, it is challenge enough keeping up with
labor regulations, handbooks, and record-keeping requirements, much less retaining a labor law attorney for
consultation whenever there is a questionable termination! Your BizAssure Member Agency offers these value added
services to assist you in keeping compliant with labor laws, handbook updates, and document reviews, and providing
consulting services with labor law and HR specialists. BizAssure members make a positive difference on a BizAssure
EPL quote. By using these services, BizAssure employers are implementing loss prevention and control, thereby
lowering their risks.