Do All Businesses Need Employment Practices Liability Insurance?

Which Businesses Need Employment Practices Liability Insurance in San Diego, CA?

When an employee files a lawsuit for reasons such as sexual harassment or age discrimination, the final settlement can be expensive and cost a business millions of dollars. This can be especially detrimental to small and medium-sized businesses that do not have extra money on hand. However, employment practices liability insurance (EPLI) can help protect your agency in the event of such a lawsuit. 

Do You Need EPLI?

The short answer is yes. Practically every agency can benefit from EPLI unless they just happen to have a few extra hundreds of thousands of dollars sitting around. Research has shown American businesses are nearly 12 percent likely to experience a lawsuit from an employee who claims his or her rights have been violated. When there is an economic downturn, the likelihood of a lawsuit increases. Businesses with 15 to 250 employees are at a greater risk than larger or smaller agencies. 

Having an excellent EPLI policy in place means almost guaranteed protection. Many business owners believe these incidents are covered in their general liability policies, but most of the time they aren’t. 

What Exactly Does EPLI Cover? 

One great thing about EPLI is that it covers a wide range of lawsuits. These might include sexual harassment, expense reimbursement, wrongful termination, defamation, deprivation of a career opportunity or promotion, inappropriate conduct, emotional distress, breach of contract, or discrimination based on age, gender, sexuality, religion, or health. It typically covers claims brought forth by current employees, past employees, temporary employees, job candidates, vendors, and even customers. 

On the other hand, EPLI coverage does not help with these lawsuits if your business performs intentional or dishonest acts. Lawsuits involving property damage or bodily harm do not fall into this category either. 

How Much Does EPLI Cost? 

How much your coverage will cost depends on several factors, including the number of past lawsuits, the types of anti-discrimination policies you have in place, how many employees you have, and how much coverage you wish to purchase. Coverage is typically limited to an amount up to $25,000,000. However, when an employee files a lawsuit, he or she can do so without risking any money. Employers, on the other hand, typically pay up to $200,000 on legal fees. If the suit goes to trial, juries side with the employee more than 70 percent of the time. 

How Do You Get EPLI Coverage? 

If this kind of coverage sounds like something your agency can benefit from, you need to know where to start when it comes to choosing your coverage. Coverage may be different, depending on where you do business in, your industry, and what kind of work your employees do on a day to day basis. For example, businesses in California are more likely to see lawsuits than most other states. The best thing to do is talk to a trusted Chula Vista commercial insurance professional about your concerns, and he or she can guide you through the process of signing up for a new policy.

Get in touch with American Tri-Star Insurance today to find out what other types of commercial insurance your agency might need. We are also a trusted provider of affordable health, home, bond, and auto insurance in Chula Vista. Call 619-827-0522 today to speak with one of our knowledgeable agents.