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Employment Practices Insurance

Understanding Employment Practices Liability Insurance (EPLI): Guide for Employers- Part 2

In my last blog, I began discussing Employment Practices Liability Insurance (EPLI). Please see Part 1, where I discuss EPLI insurance basics, what it covers, and why it’s essential. EPLI is so important that I have divided the information into two articles. Here, I’ll delve into how you may be able to prevent lawsuits and what steps to take in case you need to address a claim.

EPLI Overview

As a reminder, EPLI insurance protects against loss incurred in litigation and settling wrongful employment practices liability claims. It protects against lawsuits such as discrimination, breach of contract, wrongful discharge, and more. These events are not typically covered by general business liability insurance.

Ways to Prevent Employee Lawsuits

Here are a few of the many ways to prevent employee lawsuits.

  • Provide ongoing education for your managers and employees to minimize problems in the first place.
  • Create effective hiring and screening programs to avoid discrimination in hiring.
  • Post corporate policies throughout the workplace and place them in employee handbooks so policies are clear to everyone.
  • Show employees what steps to take if they are the object of sexual harassment or discrimination by a supervisor. Ensure supervisors know where the company stands and what behaviors are not permissible.
  • Allow the required meal and rest breaks.
  • Conduct a workplace investigation when an employee submits a complaint.
  • Carefully classify employees as to whether they are exempt or non-exempt, and accurately calculate necessary overtime pay. Be compliant with Federal and State laws.
  • Document everything that occurs and the steps your company is taking to prevent and solve employee disputes.

Filing an EPLI Claim: What to do?

We often receive questions from clients regarding when they should file a potential EPLI claim.

  • First and foremost, work with a skilled broker like Callahan Risk because we specialize in these policies.
  • Prompt reporting is crucial. Timely reporting ensures you can access coverage for defense costs included in your EPLI policy. These costs encompass legal fees incurred while defending against threats or lawsuits initiated by employees. By involving us early on, you can avoid paying out-of-pocket expenses unnecessarily and potentially compromising the handling of the claim according to policy guidelines.
  • Understand the limits of EPLI. We help keep you informed about your policy inclusions and exclusions so you can plan for financial responsibilities.
  • Consult with legal representation. EPLI policies often require using insurer-approved defense lawyers. Maintain collaboration with corporate or external legal counsel to protect your interests.
  • Review Your Policy Regularly. We work with you to ensure your coverage remains adequate as your business evolves.

Contact Callahan Risk

For personalized advice and top-tier risk management services, including navigating the complexities of EPLI, reach out to Callahan Risk. Our expertise can provide you with peace of mind and a strategic advantage in today’s unpredictable legal landscape.