Why Does my Business Need Employer Practices Liability Insurance?
When someone believes that they have been wronged by your business, they have the ability to sue you. Unfortunately, employer lawsuits have risen drastically over the last decade. You don’t have to be a large corporation to worry about being sued. Lawsuits can affect everytype of business regardless of size or industry. How do you protect yourself in these cases? Coast General discusses why your business needs Employer Practices Liability Insurance (EPLI) to protect your company.
What is EPLI?
Employment Practices Liability Insurance (EPLI) protects employers from lawsuits that arise from employees. EPLI protects you in situations where General Liability would not offer enough coverage. This type of insurance can help you save your business money and act as a form of financial protection when employees believe they have been treated unfairly in some way.
A Look at the Numbers
The statistics demonstrate the importance of having the proper coverage for your business. The opens in a new windowTelegraph Heraldrecognizes that “…the number of employee lawsuits in the last decade has risen by as much as 400 percent. The dollar amounts awarded to successful employee-litigants also have risen by as much as 260 percent in wrongful termination cases.” Lawsuits are not only costly, but also take valuable time away from operating your business. opens in a new windowTelegraph Heraldalso reveals, “The average cost of defending and settling a case filed by an aggrieved employee can easily exceed $50,000.” Ensuring you have a process, protocol, and protection is key to saving your business’s financial future.
Types of Claims and Avoiding Them
Most commonly filed claims include discrimination, harassment, and wrongful termination. There are also certain states where lawsuits are more likely to occur. The coastal states tend to be more prone to EPLI claims, such as California, Texas, New York, and Florida.
With proper coverage, you can protect yourself if a claim does arise, but there are other actions you can take. Not only is it crucial to have EPLI coverage, but it is also critical to have an updated employee handbook that includes employment law changes. You should also implement a process to evaluate employee performance and conduct. It may not always be possible to avoid a lawsuit, but you can take the right steps to ensure your business is prepared and protected in the event of one.
There is no one-size-fits-all option for EPLI coverage to protect your business. Your coverage needs will depend on the type of labor your employees perform, your industry, company size, and your location, as some policies vary by state. Just because you have EPLI coverage does not mean you are properly insured. You should discuss your coverage needs with your insurance broker to determine if you will be properly protected if a lawsuit does arise.
Coast General is here to help with any questions you have. opens in a new windowContact us todayto ensure your business is protected with Employer Practices Liability Insurance.