Business Insurance - Employee Practices and Liability Insurance

If you are a business owner, you likely have business insurance. If you don't, regardless of what type of business you own, get it!

 

What is included in one's business insurance can vary significantly between providers. Many providers offer what is called a "BOP" (Business Owner's Policy). A BOP is a comprehensive package that has many types of coverage inside the policy; some of which apply to one's specific type of business, some of which may not specifically apply.

One VERY important aspect of coverage for businesses that have employees is Employee Practices and Liability Insurance (EPLI).

The Insurance Risk Management Institute defines EPLI as:

A type of liability insurance covering wrongful acts arising from the employment process. The most frequent types of claims covered under such policies include: wrongful termination, discrimination, sexual harassment, and retaliation. In addition, the policies cover claims from a variety of other types of inappropriate workplace conduct, including (but not limited to) employment-related: defamation, invasion of privacy, failure to promote, deprivation of a career opportunity, and negligent evaluation. The policies cover directors and officers, management personnel, and employees as insureds. The most common exclusions are for bodily injury (BI), property damage (PD), and intentional/dishonest acts. EPLI policies are written on a claims-made basis. The forms contain "shrinking limits" provisions, meaning that insurer payment of defense costs—which are often a substantial part of a claim—reduce the policy's limits. This approach contrasts with commercial general liability (CGL) policies, in which defense is covered in addition to policy limits. Although EPLI is available as a stand-alone coverage, it is also frequently sold as part of a management liability package policy. In addition to providing directors and officers (D&O) and fiduciary liability insurance, management liability package policies afford the option to cover employment practices liability (EPL). 

If you don't know whether your business insurance includes EPLI coverage, check with your insurance provider. Also confirm what level of coverage is carried.

For other helpful tips on business insurance or to review an option for your business, contact Farmers Insurance - The Wertzberger Agency at 913-383-3276 or email us.