Employers Practices Liability Insurance provides coverage to employers against claims made by employees alleging discrimination (based on sex, race, age or disability, for example), wrongful termination, harassment and other employment-related issues, such as failure to promote. This coverage is the most likely overlooked.

Key Points to Consider When Purchasing Employers Practices Liability Insurance

Why Would I Need This Coverage?

You cannot plan for the unpredictability of a current, or ex-employee. In today’s world, it seems anyone can bring a lawsuit against anyone. Your business cannot afford to defend a lawsuit even if it is of the ridiculous variety. Employers Practices Liability Insurance is a key component to any business with employees.

What Is Covered?

Employers Practice Liability will provide coverage up to the policy limits for legal defense, and compensatory damages. Some examples of claims are: 1. Female employee files a lawsuit claiming sexual harassment. 2. An employee of a fast food restaurant files a discrimination lawsuit because he was told to shave his beard. 3. A 60-year-old employee did not make a sales quota was fired, files an age discrimination lawsuit.

What Limits Should I Have?

This will depend on the size and type of your business. Typically, most small businesses have a $500,000 – $1,000,000 limit. You will also need to select a deductible that will be sufficient to your assumption of risk level. Most deductibles are $1,000 -$5,000 and will adjust your insurance cost accordingly.

Is Employers Practice Liability Insurance Expensive?

It depends on your coverage limit, deductible, gross revenue, business type, and what coverage options you select. Some Insurance carriers allow you to add some Employers Practices Liability Insurance to your General Liability, or Business owner’s policy. However, when this coverage is endorsed to your policy it could have coverage limitations so beware.

How Should I Obtain Employers Practices Liability Coverage?

Employers Practices Liability Insurance should be purchased from a commercial insurance agent. This coverage is highly recommended for restaurants, businesses with more than 2 employees, and businesses that have multiple locations. Your agent should help you identify limits needed based on your industry type.