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Breaking Down EPLI Coverage Options for Your Clients

This year is shaping up to be a challenging one in terms of labor law and employment practices – from changes to minimum wage and overtime protections to large-scale Equal Employment Opportunity Commission (EEOC) investigations involving broad investigations into areas such as LGBT rights and pregnancy bias claims and increased scrutiny into social media policies. What businesses of all sizes across all industry sectors must realize is that they cannot go without the protection needed to respond to employment practices claims – including allegations of discrimination, sexual harassment, and retaliation, among others. Even if a company is innocent, it still must defend itself against a charge of employment practices misconduct, which can be costly.

That’s, of course, where Employment Practices Liability Insurance (EPLI) comes in. There are various ways EPLI can be designed to provide the coverage a client needs, depending on their risk profile and specific exposures. It’s important to break down their options. Here are several considerations to discuss with your business clients:

  • Offering EPLI coverage along with Directors & Officers (D&O) Liability insurance: This may be a cost-effective approach, but be sure to evaluate the breadth of coverage available.
  • Providing EPLI coverage along with Commercial General Liability insurance: Again, a cost-effective approach in addition to ease of program administration, but there may be non-concurrent triggers (claims-made vs. occurrence) and the breadth of coverage must be properly assessed.
  • Securing EPLI as stand-alone policy: This may offer a client the broad scope of coverage needed along with risk management and loss prevention services. The cost, however, may be higher than other alternatives.

Other important considerations include the perils covered under the policy and who is insured. For example, some of the perils that can be covered include:

  • Wrongful Termination
  • Sexual Harassment
  • Discrimination
  • Workplace Torts
  • Breach of Oral/Written Employment Contract
  • Employment-Related Misrepresentation
  • Wrongful Failure to Employ
  • Wrongful Failure to Promote
  • Wrongful Discipline
  • Wrongful Deprivation of a Career Opportunity
  • Failure to Grant Tenure
  • Negligent Evaluation
  • Negligent Supervision
  • Invasion of Privacy
  • Libel, Slander
  • Employment-Related Defamation
  • Employment-Related Emotional Distress
  • Constructive Discharge
  • False Arrest
  • Retaliatory Actions (including/excluding lockouts)
  • Whistleblower Claims
  • Wrongful Hiring
  • Mental Anguish, Humiliation, Emotional Distress
  • Wage and Hour

Also, an EPLI policy can be designed to cover employees, including leased, seasonal, part-time and temporary workers; managerial/supervisory employees; former employers; directors and officers; partners; shareholders; volunteers; independent contractors; and joint employers.

In addition, be sure to review the type of defense coverage available in the policy, its limits, retentions, deductibles, covered territory and any exclusions included.

Caitlin Morgan provides modular policies from multiple carriers with an extensive menu of coverage that includes EPLI insurance. We can assist you with securing the right type of program to address your client’s exposure. Please contact us at 877.226.1027.