Many businesses lack employment practice liability insurance because they don't understand it. Then when they get sued by an ex-employee, they wish they had it since it covers legal costs. Your general liability insurance only covers so much, which is why businesses add endorsements to their policies. However, do you need to have EPLI for your business? Let’s discuss this.
What Is EPLI?
Employment practice liability insurance (EPLI) protects a company that gets sued by former employees, job applicants, or vendors. These claims might be filed over improper management behavior, such as wrongful termination or sexual harassment. Then again, sometimes disgruntled former staff members don't have a real case and just want a shot at a big settlement. Either way, EPLI pays for court costs and attorney fees, which would otherwise be expensive legal battles.
5 Reasons You May Not Have EPLI
Here are five top reasons businesses usually don’t have but let’s see if they are right about it.
- I have no employees
If your organization has no employees, you don't need to spend extra money on EPLI coverage. Keep in mind your firm can also get sued by a temp who is an employee with an outsourced staff agency. In fact, that's the most common type of workplace complaint. Not all companies that offer EPLI, however, provide third-party coverage in temp agency or other outside vendor scenarios.
- I have an attorney in the family
If you already work closely with a relative who is an attorney with deep experience in employment cases, you might not need EPLI. Perhaps your relative who practices law with give you a good deal on legal fees.
- It is a waste of money
Intangible things like complex insurance you don't understand might not be worth the cost. If it's something you can never see or appreciate, you simply may not need it. Since insurance costs rise the more employees you have, it's important to make sure costs fit your budget.
- My relationship with my employees is great
Many businesses already practice risk management in terms of minimizing employee complaints because they foster a friendly workplace. The more successful you are at team leadership, the less likely employees will leave on bad terms. Remember that it's still possible to get sued by former team members for various reasons.
- It will never happen to me
No one really knows the future. Just because you enforce strict risk management in your employment practices doesn't guarantee your company will be free of employee complaints in the future. If the economy goes sour, employees may start making demands.
Learn More About How EPLI Will Protect Your Business with GrayStone Insurance Group
Employment practice liability insurance is not for all businesses, but it does offer financial protection that can pay for expensive lawsuits. If you would like to learn even more ways EPLI protects your business assets, contact us today at GrayStone Insurance Group. Our experts will help you find the right plan for your business.
