Non Profit organizations should strongly consider EPLI being included in their insurance program structure. EPLI is considered one of the most necessary attributes of nonprofit organizations liability insurance structure.
What is EPLI?
EPLI stands for Employment Practices Liability Insurance and this form of insurance covers employers in case employees file certain claims against the employer. For example, some employees might initiate litigation against their employer for violating the Americans with Disabilities Act or Title VII.
More commonly, employees accuse their former employers of discrimination, wrongful termination, harassment, wrongful infliction of emotional distress, improper treatment, etc. Employees can be quite resourceful and might cook up all sorts of claims, even if they’re totally bogus.
Statistics point to glaring evidence that employers are more likely to face employment practices liability claims rather than property or general liability claims. Settlements of employment practices liability claims average about $40,000. When employees are compensated for losses related to EPLI, the average compensatory amount is $218,000. Did you know that 10% of wrongful termination claims award damages above $1,000,000?
Simply put, general liability insurance will not protect you from employment practices liability claims. EPLI coverage will provide coverage for your legal fees so that you are not stuck paying exorbitant amounts of money to lawyers.
Prepare Yourself with Coverage
The majority of EPLI policies do exclude certain types of claims. It’s very important that you customize your EPLI policy so that it will cover the claims that will most likely have to defend. Many policies exclude claims made regarding employment contracts. Also, some will exclude claims arising from supposed violations of the Employment Retirement Income Security Act, COBRA, the Worker Adjustment and Retraining Notification Act, and the National Labor Relations Act.
Also, some policies will exclude punitive damages. Some jurisdictions mandate that it is unlawful to insure a company that has been held liable for punitive damages. This means as an employer, you’ll have to pay out of pocket for any expenses connected with punitive damages.
Your EPLI policy, however, will provide protection for you if an employee issues an employment practices related claim against you. The size of your company and its litigation history will be a factor in the price of the policy, along with the breadth of the coverage.
Costs Covered By EPLI
If an employee files a claim against you that is covered by your EPLI policy, then your insurance company will pay for your attorney subject to any retention that may apply and the limit of the policy. Some EPLI policies state that the insurance company will pay all legal costs necessary to defend against the claim. Often, the insurers will select the attorney for the insured party. Some insurers do allow the policy holder to select their own attorney, and other companies provide a list to choose from.
All employers deserve to protect themselves so that they can run their business with peace of mind. Only a qualified EPLI policy will protect your company in the case of an employment practices liability claim. You should be meticulous and diligent when building your EPLI policy. Make sure you know exactly how and where you are covered. This way, you can take advantage of
Read more about nonprofit liability insurance and why EPLI helps ameliorate your insurance policy.