Employment Practices Liability

What does it cover?

Employment Practices Liability Insurance, often referred to as EPLI coverage, protects corporations and its managers from litigation arising from employment, such as wrongful termination, discrimination (age, sex, disability, etc.), wrongful termination, harassment, and other employment-related allegations. The policy will defend the company and any named employees in such litigation as well as pay any liability incurred as a result. Even if the claim is groundless or fraudulent, the defense of a suit can be expensive in time, resources and financially.

Cost and applications:

• Premiums start at $2,500.
• Deductibles start at $5,000.
• Limits are available from $500,000 to $25,000,000.
• Please click here to download the Employment Practices Liability application.

Claim Scenarios

NOTE: The claims scenarios summarized are offered only as examples. The examples are not intended to establish any standards of care or to serve as legal advice appropriate for any particular factual situations. Coverage depends on the actual facts of each case and the terms, conditions and exclusions of each individual policy.

1. A class action lawsuit was filed against a major consumer retail products corporation. The claimants, all women, alleged that the corporation discriminated against them by requiring a strength test at its meat packing plant in Iowa.

Outcome - According to the EEOC, which filed the suit on behalf of the women, roughly 60 percent of women failed the test while nearly all men passed it. An Iowa jury found intentional discrimination and a U.S. district judge upheld the decision and awarded $3.4 million in damages to the 52 plaintiffs.

2. A 5 year old professional services firm has 50 employees, 90% of whom are under the age of 45. The firm's softball team plays every Thursday afternoon in the summer. Team members are allowed to leave early to participate. None of the employees over the age of 45 are invited to join the team. The office manager mandates that they stay to answer the phones and are not allowed to have time off on Thursday afternoons because of the game schedule.

Outcome - The older workers sue claiming age discrimination and unfair treatment in the workplace. The corporation paid $325,000 in defense and $175,000 in indemnity.

3. An Islamic woman is hired to work for a retail store. She arrives at work wearing a veil. Her manager asks her to remove the face covering so customers would feel more comfortable. The employee declines citing religious reasons, and notes that she wore the veil to all of her interviews. The manager tells her she must not wear the veil in order to keep her job. She refuses and is immediately terminated.

Outcome - The employee sues on the grounds of religious discrimination. The company paid $55,000 in defense and $35,000 in indemnity.

Optional coverage enhancements (but not limited to):

• Third Party Coverage.
• Punitive Damages Coverage with Most Favorable Venue Language (where insurable by law).
• Employee Helpline.
• Online Risk Management Services.

Examples of who buys:

All companies.