As litigation continues to be a common problem for companies, employment practices liability (EPL) coverage is becoming more important for businesses, both big and small. What was once considered solely for large companies, EPL coverage is now being recognized as important coverage for all sized businesses.
What Is Employment Practices Liability Insurance?
Employment practices liability insurance protects businesses against lawsuits involving wrongful termination, sexual harassment, discrimination, invasion of privacy, false imprisonment, breach of contract, emotional distress, and hourly and wage violations. The coverage is designed to reimburse the cost of legal representation, court fees, settlements, and judgments.
What Considerations Should I Think About Before Purchasing?
Unfortunately, an EPL insurance policy can be expensive, and it is important to make sure you are making the right decision with your coverage. In order to ensure your EPL policy fits with your needs, consider the following:
Make sure your policy has proper coverage. Small business owners should select a policy that is reasonably priced, and then make modifications and additions to the policy as appropriate.
Understand who has control of legal decisions. Some policies give the insurance company sole rights to designate counsel of their choosing in the event of a claim. Before purchasing a policy, be sure you understand whether you are able to hire a lawyer of your choosing or if you must forfeit that ability.
Fully understand which losses are covered under the policy. Most EPL policies will provide coverage for losses such as back pay, benefits, and legal fees, but some do not cover fines, penalties, punitive damages, and any travel or accommodation costs that were a result of the lawsuit.
Not all policies are equal in their coverage. While it is important to find a policy that fits within your budget, it is essential to fully understand your coverage and its shortfalls prior to purchasing the policy.
Contact The Experts
Even with the most conscientious business owner, every company is at risk of being accused of violating employment laws. Your BenefitSource insurance professional understands the risks associated with owning a business and the challenges of operating within a budget. We work directly with you to make sure we understand your needs and you understand your coverage. Call us directly at (877) 215-5431 or email us to set up your evaluation.
For more insurance tips and information, follow us on Facebook!