What Is Employment Practices Liability Insurance, and Why Does My Business Need It?

Small firms that hire, manage, and fire employees are covered by employment practices liability insurance. It pays for litigation costs incurred by employees, but why does your business need it? 

How Your Business is Protected with Employment Practices Liability Insurance?

In the event that an employee files a lawsuit alleging discrimination, wrongful termination, harassment, or other wrongdoing, insurance will pay your legal costs.

In these circumstances, your employment practices insurance will pay for your:

  • Lawyer’s fees
  • settlement expenses
  • Legal rulings
  • Court fees and other administrative fees

Insurance against the liability of employment practices excludes:

  • Both civil and criminal fines
  • Punitive harm
  • Paying wages you should have covered
  • Deliberate employer misconduct
  • You harmed an employee’s property
  • Alleged employee injuries
  • Dispute about unemployment benefits
  • Disputes involving claims for workers’ compensation

Are You Eligible?

For the vast majority of small firms, insurance is acceptable. However, companies who lack fundamental human resources policies on issues like employment at-will, discrimination, sexual or workplace harassment, and guaranteeing accommodations for disabled employees may find it challenging to obtain coverage.

Additionally, companies who don’t use employment applications, don’t periodically evaluate their employees, and have previously been sued for unfair employment practices may not be appropriate candidates for this form of insurance.

Do You Need Employment Practices Liability Insurance?

Any small firm with staff should think about purchasing liability insurance.

This type of small company protection is a great fit for companies in the following sectors:

  • Construction design consulting
  • Food and drink
  • Computer technology
  • Insurance industry experts
  • Nonprofits in the media and advertising
  • Image and video

If you are interested in employment practices liability insurance or have questions, contact Panichelle Insurance today!

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