By Casey Myers

Champion Risk & Insurance Services welcomes the opportunity to provide you with important information about insurance coverage that can help you mitigate risk for your business. In this article, we’ll review Employment Practices Liability Insurance (EPLI). This is the third article in our series, and there’s more to come in future issues, including: Warehouse and Cargo liability, Workers’ Comp and Cyber coverage, among other topics. Please contact Casey Myers with your questions about any insurance-related matters.

According to a study by insurance company Hiscox, the average U.S. company faces a 10.5% chance of having an employment claim filed against them. In California and New Mexico, the probability increases to more than 50 percent.

The average claim takes 318 days to resolve and costs $160,000, so Employment Practices Liability Insurance (EPLI) can be critical to your business’s survival.

What is EPLI?

Employment practices liability insurance coverage varies, but in general it covers businesses against claims by employees that the company has violated their civil rights, including:

• Discrimination based on age, disability, gender, national origin, race or religion.
• Sexual harassment.
• Wrongful termination.
• Retaliation (taking negative actions against an employee because they report discriminatory practices).
• Employment-related defamation.
• Invasion of privacy.
• Failure to promote.
• Breach of employment contract.
• Deprivation of a career opportunity.
• Negligent evaluation.
• Lack of appropriate pregnancy and lactation accommodations.
• Limited coverage for immigration claims, such as failure to check an employee’s work status.
• Limited coverage for wage and hour claims.

It may also cover actions committed by anyone within the organization. Most policies will cover the cost to settle a case out of court, as well as defense costs if an employee lawsuit goes to court. The best EPLI policies provide set limits for settlement and unlimited defense costs outside that limit. They are also flexible enough to accommodate evolving employment law and policy.

Why do I need coverage?

Without it, your business is exposed, and you pay out of pocket for employee claims. It covers the cost to defend or settle employment-related lawsuits, which is especially important in industries like moving and storage with high rates of employee turnover and employees who regularly work away from the facility. These employees are more likely to allege discrimination, sexual harassment, wrongful termination and wage and hour violations.

How much does EPLI cost?

Several things can impact costs, including: the number and types of employees you have. Are they full-time, part-time or seasonal? New York and California offer more legal protection for employees, so businesses in these states have higher rates. Other factors that can impact your cost for coverage include historic employee turnover rates, your claims history, hiring and firing procedures and documentation of employee training and conduct.  

How can I lower my risk of EPLI claims?

Assess your company’s discrimination and harassment risk factors and take steps to minimize any risk.

• Ensure that all employees understand their legal responsibilities and your anti-discrimination and anti-harassment policies and complaint procedures.
• Demonstrate your commitment to preventing discrimination and harassment.
• Discuss the importance of complying with anti-discrimination and anti-harassment policies during new employee orientation and at employee meetings.
• Incorporate compliance with non-discrimination policies into performance evaluations.
• Explain who employees can contact internally with discrimination questions, concerns or complaints.
• Champion equal employment opportunity within your business.

Share information about discrimination and harassment prevention early and often. It should be in employee handbooks, part of new employee orientation, reiterated during employee meetings and in any internal newsletters or publications.

Hold all employees accountable for complying with policies and acknowledge efforts to create and maintain a work environment in which discrimination and harassment aren’t tolerated.

Casey Myers is an insurance industry veteran with more than 16 years’ experience. As vice president for Champion Risk & Insurance Services, she specializes in providing insurance coverage and guidance for moving and storage clients. Prior to joining Champion Risk, Casey worked for Paul Hanson Partners.

She is well-versed in industry trends, challenges and changes facing the household goods industry and serves as an associate board member for the California Moving & Storage Association (CMSA).

When she isn’t working, Casey enjoys cycling, running and spending time with her husband Diego and their dog Chance.