EPL Insurance: Cost, Coverage & Providers

Insurance is a great tool that can help businesses protect themselves against liabilities. When thinking about what insurance you need, most business owners focus on risks directly related to their daily operations, including customer or third-party damages, employee injuries, or service claims. But the inner workings of your company and dynamics between management and employees can also be a great source of potential liabilities you cannot ignore. The best way to protect your business from these liabilities is Employment Practices Liability Insurance (EPL insurance or EPLI).

What is EPL Insurance?

EPL insurance is a policy that protects your business from any liability of employment practices or employee claims against the company (or their supervisors). For example, an EPLI policy would cover claims like sexual harassment, wrongful termination, or gender discrimination. Such coverage is essential for every business, irrespective of its size or industry.

What Does EPL Insurance Cover?

Although every EPL insurance policy may differ slightly, good EPL insurance coverage would include claims of:

• Discrimination based on protected categories
• Wrongful termination, demotion, or punishment
• Harassment from supervisors or peers (sexual or otherwise)
• Deprivation or mismanagement of benefits
• Management retaliation
• Defamation or slander by management or peers
• Negligence (in evaluation, compensation, supervision, or promotion)
• Distress (emotional or mental)
• Invasion of privacy
• Breach of employment contract

What is not covered by EPL Insurance?

On the other hand, EPLI policies would not cover the claims of

• Injury or illness
• Damage to property
• Fraud and intentional wrongdoing
• Unpaid wages, civil fines, and penalties
• Third-party slander or defamation
• Professional negligence

You would need to invest in other types of insurance policies to cover these potential liabilities.

Benefits and Risks of EPL Insurance

EPL insurance policies can offer you a host of benefits and cover potential risks and liabilities associated with running the business. Some of the major benefits of EPL insurance are:

Covers Legal Expenses

Lawsuits from your employees can be extremely costly, time-consuming, and damaging to your business. But EPLI covers your legal expenses – and any potential damages – protecting you, your business, and your business assets.

Offering Peace of Mind

The knowledge that EPLI will protect you in case of a legitimate workplace issue – or from a disgruntled employee – can allow you and your team peace of mind, giving you a chance to focus on the business.

Protecting Business Assets

There are many possible scenarios – like employee claims or lawsuits – that can destroy your business, potentially losing your business assets or wiping out your business earnings. EPLI policies protect you in such scenarios, allowing you to protect and preserve your business assets.

However, you must understand the procedures of your EPLI policy, the limits of EPLI coverage, and the claim it is intended to cover. Otherwise, you run the risk of the EPLI carrier denying your claim, leaving you to absorb any liability costs.

Tips for Buying EPL Insurance

Finding the right EPLI coverage for your business might be tricky as the coverage you need and its costs may depend on multiple factors – including your industry, employee headcount, risk profile, and EPLI claims history. Here are some tips that can help you find the right EPLI policy for you:

Contact an Independent Agent

Working with an expert independent insurance agent can help you better understand your converge needs and help you work out the best rates for your EPLI policy.

Identify your Key Risks

Analyzing your business structure, personnel, training and management policies, and general day-to-day activities thoroughly is crucial to identifying all potential risks and ensuring sufficient EPLI coverage.

Compare Quotes

Premium rates often vary between different insurance providers. Considering and comparing at least three or more quotes can help you find the best coverage at the lowest possible rates.

EPL Insurance Providers

Many small business insurance companies can offer you EPLI coverage. But while selecting the one best suited for your business needs, consider the fact that EPLI claims are often expensive even without reaching the litigation stage. So, look for an insurance provider with a good credit rating and HR support to implement healthy employment practices within your company.

Here are seven of the top EPL insurance providers for you to consider:

The Hartford: – Best for Customizable EPLI

Overview

The Hartford is one of the largest national insurance carriers with an A rating that usually bundles EPLI with a business owner’s policy. They offer you broader coverage, extending it to third parties that may claim harassment or discrimination against your business. You also have the option to obtain a stand-alone EPLI policy. The Hartford also offers educational resources for implementing healthy employment practices.

Amtrust: Best for EPLI Coverage with No Minimum Premium

Overview

Amtrust – an A credit-rated insurance provider – offers EPLI policies mainly to small and medium-sized businesses. The majority of small businesses can find necessary coverage with Amtrust’s 350+ class codes. Additionally, its online portal and dedicated site can help you request quotes online easily while allowing you to be proactive about healthy employment practices.

Hiscox – Best for Quick Online Quote

Overview

With its quick and easy quoting process and multiple EPLI-related data analysis studies, Hiscox is one of the leading EPL insurance providers. With an EPLI policy, you can also access the “Hiscox C-Suite” management liability policy package. Additionally, this policy has a 180-day extended reporting period even after policy termination.

Travelers – Best for Accessing Employment Practices Resources

Overview

With 160+ years of experience in the personal and commercial insurance space, Traveler’s EPLI policy offers you access to a dedicated employment practices resource website: Risk Management Plus+ Online®. It offers you resources like hiring checklists, personnel manuals, and cybersecurity guidelines for management guidance on risk mitigation, liability, and crime.

CoverWallet – Best for Comparing EPL Insurance Costs from Multiple Providers

Overview

CoverWallet is an online insurance brokerage that allows small businesses to compare insurance prices from top carriers before getting an EPLI policy. You can compare the coverage and prices of multiple policies within 10 minutes and select the one best suited for your business.

State Farm – Best for Unlimited HR and Employment Practices Consultation

Overview

As the largest domestic insurance provider in the US, State Farm has the resources that can support your business needs when it comes to employment practices issues and claims. Purchasing an EPLI policy through State Farm gives you access to a network of HR professionals for free online support. This includes resources and guidance on hiring and termination policies, HR-related handbooks and forms, and online training on implementing healthy employment practices.

Nationwide – Best for Accessing Free Legal Advice

Overview

With A.M. Best rating of A+, Nationwide has the resources and stability to handle even the most costly EPLI claims. Nationwide offers its EPLI policyholders access to HR policies and handbooks, forms, online training, and employment issues-related advice. Additionally, you can also access a hotline – available in multiple languages – for free, confidential advice regarding any issues you may be facing currently as an employer.

Conclusion

Every business – big or small – carries risks and liabilities of employment-related incidents that can result in expensive claims and litigations. EPLI policies can help businesses cover these claims and protect business assets by covering the costs of legal fees, judgments, and damages. Being proactive in implementing healthy employment practices and focusing on risk mitigation – with comprehensive written policies and handbooks – can help you avoid employment practice liabilities and prevent claims. Many EPL insurance providers offer you access to resources that can help you achieve that. So consider your industry, day-to-day operations, risk profile, employee headcount, and HR resources you may need before selecting the EPL insurance provider and coverage policy best suited for your business.

Frequently Asked Questions