Employment Practices Liability Insurance is designed to safeguard small business owners from potential legal actions brought by their employees for various reasons. That includes responses to administrative actions that lead to allegations of wrongful termination and breaches of contract. In essence, EPLI mainly protects businesses from employee lawsuits alleging infringement of their employee rights. Although EPLI lawsuits were previously more prevalent in big companies, there has been a significant increase in claims from small businesses too. Many of these complaints stem from interpersonal issues, including with small business owners. In fact, more than half of the complaints filed with the EEOC in 2020 involved allegations of retaliation. It should also be mentioned that the percentage of sexual harassment complaints has increased to about 31.7% of total EEOC claims, with a growing number of LGBTQIA-related harassment allegations making the headlines in the last five years too. The gig economy’s expansion has led to a notable increase in EPLI claims of other types too, causing a steady rise in wage and hour legal conflicts, notably a concerning uptick in Fair Labor Standards Act cases over the last decade.

What is included in EPLI coverage?

EPLI insurance provides small businesses with protection against a range of claims including sexual harassment, discrimination, wrongful termination, breach of contract, negligent evaluation, failure to promote, denial of career opportunity, infliction of emotional distress, and mismanagement of benefit plans.

The importance of EPLI for small businesses.

Due to the increasing amount of employment-related legal actions, particularly targeting small companies, it is essential to have EPLI insurance. Smaller businesses are at an even greater risk because they have limited internal resources and very small HR teams. The potential costs of legal fees and settlements without protection from EPLI can be quite unsettling if one does not have a good cover in place. A recent report revealed that the average US company faces a 10.5% chance of having an employment claim filed against them, and there are exceptions like California and New Mexico which have a much higher probability of over 50%. What’s more, is that the average cost of settling an EPLI claim is $75000. The average jury award for an EPLI case is $21700, and it’s not just financially draining, the average EPLI case takes 300+ days and can stretch on for a long time.

Choosing the right EPLI for your business

Access Your Risk:

First and foremost, a complete top-to-bottom evaluation is needed of not just the business, but also the industry. Small business owners must determine the risks by looking at the number of employees, existing policies, and compliance and review the same thoroughly. Only then can we help you tailor an EPLI cover that’s just right for you.

Work with a trusted agency:

Select a smaller insurance agency that can cater to your unique requirements if you wish for better customer service. As a small business, we understand the dedication and passion needed to run a small business, and we are here to help whenever you need assistance. Our main focus at Gonzalez Insurance is to offer outstanding customer service, and having an attentive and knowledgeable agent can significantly enhance the overall experience. This means connecting with a real human when you have questions and never bots.

Best practices for reducing EPLI claims:

Having clear and transparent HR policies is a must, and these should be communicated habitually to employees. Besides having policies in place, HR teams must ensure that training and education should be in place to prevent harassment and discrimination for all employees. It’s also extremely important for managers, at all levels, to have detailed records of employee performance and disciplinary records to minimize risk in case of claims.

If you’re a small business owner and you don’t want to lose thousands of dollars, and precious sleep, over EPLI claims, get in touch with us for a custom, tailored policy. With years of experience under our belt, we can help get you the best EPLI cover to protect you and your small business.