The topic of EPLI or Employment Practices Liability Insurance has been one I seem to have been discussing a lot lately. Whether it's clients facing their own employment challenges or vendors starting to require their clients carry the coverage, EPLI seems to be a hot topic. Therefore, I decided to revive an article I wrote in 2007 on the subject with a few updates.
Did you know that nearly 75% of all litigation against today's corporations involve employment suits? Are you aware that only 30% of business owners carry protection against such a lawsuit? Statistics like this can be frightening, especially when looking at the types of small business scenarios where an Employment Practices Liability claim becomes a reality.
According to a study conducted by the EEOC, (Equal Employment Opportunity Commission) of the 75,428 private sector charges filed in 2005, almost 65% of all charges filed were race and gender related. Other claim possibilities include retaliation, age, disability, national origin, religious, and equal pay discrimination suits.
A nice part of my job is getting to know each of my clients. I particularly enjoy seeing each employer's work environments, and how my clients interact with their employees. But sometimes in these close knit employment settings, when discussing EPL Insurance, I hear "we take care of our employees and we're almost like a big family...". Unfortunately, statistics show us that just because employers think of employees as family, that doesn't always mean the employees share that same feeling.
My statement rings true when considering that it is now more likely to have an Employment Practices Liability claim than it is to have a General Liability claim or Property loss. Insured members carry millions in protection against Property and General Liability losses but tend to pass on a coverage that protects the lifeblood of their business.
Why are small businesses more reluctant to purchase management liability coverages such as EPLI? Typically it has to do with where the premiums have been set in the past, the lengthy application process and a vague understanding of the real exposure that every employer faces.
In an effort to correct these past deterrents, a number of insurance companies have started offering 1,000,000 of EPLI coverage for $750 to $1,500 (based on underwriting). The applications process has been streamlined and computer automation has made the submission process a snap. We can even quote online for most industries over the phone.
Now that you know a bit more about the exposures that every employer faces, be sure to spend some time discussing this topic at your 2015 renewal. This product can be purchased on a monoline basis, so if you have an immediate need, please feel to contact us for a quote.
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Information collected from CNA Insurance Company, PLUS Div; Equal Employment
