Employment Practices Liability insurance provides coverage to you as an employer against claims made by employees claiming discrimination (gender, race, age, etc.), wrongful termination, harassment, and other problems regarding their employment.
Small businesses are usually the most vulnerable to employment claims. That’s because they usually lack a legal department or employee handbook that clearly defines policies and procedures that determine the hiring, disciplining and terminating of any employees.
The moment you interview a prospective employee, you are at risk of a claim. For example, if you choose not to hire the person, that individual could claim that you discrimated against them. Or, if you hire that person and then fire them because of their poor attendance, that person could claim wrongful termination on your part.
EPLI can be offered as an endorsement to a Business Owner's Policy (BOP), a General Liability Policy (GL), or a specific stand alone policy can be written in conjunction with a BOP policy.
EPLI claims can come from current employees, former employees, or people who just came in for an interview. And they can take numerous forms, such as:
- Emotional distress
- Invasion of privacy
- Negligent hiring or promotion
- Sexual harassment
- Wage disputes
- And more…
Important Employment Laws
While Employment Practices Liability insurance is a smart investment for many companies, it's important to understand and carefully follow these laws:
- Title VII of the Civil Rights Act of 1964: prohibits discrimination on the basis of race, color, religion, nationality and sex. Also prohibits sex discrimination on the basis of pregnancy and sexual harassment.
- The Equal Pay Act of 1963: prohibits employers from paying different wages to men and women who perform essentially the same work under similar working conditions.
- The Civil Rights Act of 1966: prohibits discrimination based on race or ethnic origin.
- The Immigration Reform and Control Act of 1986: prohibits discrimination on the basis of nationality or citizenship against people who are authorized to work in the United States.
- The Americans with Disabilities Act of 1990: prohibits discrimination against someone with disabilities.
- The Bankruptcy Code: prohibits discrimination against someone who has declared bankruptcy.
- Equal Employment Opportunity Act of 1972: prohibits discrimination against minorities based on poor credit ratings.
- The Age Discrimination in Employment Act: prohibits discrimination against individuals who are 40 or older.