Why Businesses Need Employment Practices Liability Insurance

Employment Practices Liability Insurance

In 2015, the EEOC received 89,385 discriminatory employment practices complaints, including more than 4,000 in Pennsylvania alone.  In addition to private party lawsuits, the increase in claims brought on by federal, state and city regulators is causing more businesses to purchase Employment Practices Liability Insurance (“EPLI”).

A decade ago, most businesses didn’t buy employment practices liability insurance (EPLI). According to a survey by insurance analytics company Advisen, many more businesses now have stand-alone EPLI coverage. Below is the breakdown of who’s covered by size of business:

  • 41% of all firms with more than 1,000 employees
  • 34% of all firms with 500 – 750 employees
  • 23% of all firms with 200 – 500 employees
  • 32% of all firms with 50 – 200 employees
  • 20% of all firms with fewer than 50 employees

High expectations, and diminished loyalty attributable to today’s workers, create a situation in which employees are apt to take offensive action. Businesses have a recipe for disaster when they add 24/7 media coverage of high profile cases and aggressive lawyers soliciting potential claimants to file wage and hour lawsuits in states including Pennsylvania.

What is EPLI? Does my business need coverage?

Employment practices liability insurance protects an employer from employees’ claims alleging discrimination, wrongful termination or harassment, including sexual harassment. EPL insurance pays for liability damages and defense costs due to these charges brought by full-time, part-time, temporary and seasonal employees, applicants for employment and recognized volunteers.

Having the right EPLI insurance is critical to protect your business from the potentially large cost of employment litigation. That is why KMRD provides a variety of Human Capital Solutions for organizations of all sizes and levels of HR sophistication. Our Human Capital Practice Group is set up to help you properly respond to regulatory requirements and establish policies and practices to curtail risks associated with employment practices.

Contact us below to have a KMRD expert review your policy to determine if your business is adequately covered.

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