Did you know employers have a 12% probability of employee litigation? The rates can go to 20% if you have more than 500 employees.
Employee litigation is a liability to your business. It costs an average of six-figure dollars to defend such cases. Guilty or not, the financial burden and time spent on employee litigation are draining.
You need to protect your firm from these litigations and legal fees around it. An employment practice liability insurance is an ideal safety net.
From the moment you hire a new employee, you are at risk of an employment claim.
If you own a business, you need employment practices liability insurance (EPLI). Keep reading to learn about EPLI and how it salvages your company.
What Is EPLI?
Employment practices liability cover is an insurance policy for employers. The policy covers claims by employees; current, former, or potential staff. Every company is susceptible to employee litigation.
Some employees are looking for a quick pay off. The insurance cover protects you from adversities of such claims. The adverse effects include defamation, penalties, and costly legal procedures.
An employment practices liability insurance is not compulsory. EPL is relevant and commendable for both small and big businesses.
What Does Employment Liability Cover?
Commonly, a company is under the standard insurance policy. EPLI covers more situations not covered by the standard policy.
The policy offers coverage for claims against:
- Discrimination (based on gender, sex, race, religion, and ag)
- Sexual harassment
- Wrongful termination or discipline
- Invasion of privacy
- Breach of contract
You can customize your insurance policy to cover more claims. Depending on your business dynamic, your priorities of coverage may vary.
EPL insurance covers not only actual wrong acts, but also alleged acts. A strong EPLI offers the legal resources relevant to addressing lawsuits. The resources range from competent laws, investigation, and technology needed for specific cases.
Employees will sue for a wide range of reasons based on the work environment, employment policies, wages, and safety. There are legal grounds for employees to sue your company.
Each employee has rights protected by law. You need employment practices liability coverage to protect your company.
Who Is Covered?
Employment practices liability insurance protects your business and the employee. The company is accountable for employment practices liability claims.
This might include employees at specific positions, like managers and human resources.
High-level managers and supervisors are more liable for such claims. They are in direct contact with employees and influence employee work experience.
As final decision makers, they are accountable for the harm caused to employees. You need your staff protected from legal adversities of employee claims. The EPLI also protects the business in general.
A class suit threatens the existence of your company. Protecting the business would imply patents, assets, and licensure.
Why Your Business Needs Employment Practices Liability Coverage
In 2019, there were more than 72,000 employee claims on equal employment only. Your business is not safe from such claims.
Even if you follow all employment policies to the latter, there will always be a risk of employee litigation.
You need EPL for the following reasons:
- Protection against many kinds of employee lawsuits.
- Crippling legal expenses during litigation: Employee claims on issues like racial discrimination, sexual harassment, or wrongful termination can be costly. If such cases end in court, you will incur thousands of dollars in legal costs and attorney fees. Such legal costs can cripple your business to bankruptcy. You do not want your company at risk after years of arduous work.
- Access to Legal Help: During litigation, situations can escalate so fast. You need to work with the best lawyers with sufficient resources to countersuit or win the case. EPL insurance offers legal resources to offer the best representation. The insurance policy saves you the hustle of finding a competent lawyer to represent you.
- Timely Response to Employee Claims: You need your company fully prepared during litigations. Delays in filing a motion or making legal processes can add to the liability of being sued. You need timely responses to avoid litigations that drag your business through the mud. EPLI equips you with resources like funds and legal advice. This helps you make timely and sound legal decisions.
- Risk Management: Lawsuits expose your business to all kind of risks. The risks range from losing investors, licensure, or employees. If you are in a business partnership, you stand the risk of losing your partner. Think of all the potential risks a business can face. Employee litigation can get you there.
Employment protection litigation insurance not only steps in during a crisis, but also before. EPLI offers risk management training and consultation. This helps your company avoid common employee legal claims.
The services by employment protection litigation policy reduce the probability of lawsuits.
Which Business Needs an Employment Protection Liability?
Here at Central Carolina Insurance Agency, we recommend protecting your business from any legal risks. An employment practices liability insurance is an asset for all types of businesses.
The cost of your business EPLI coverage depends on the number of staff, employee turnover, organizational structure, and policies. The policy offers additional protection to avoid spending thousands of dollars in legal and attorney fees.
Regardless of the business industry, organizational structures, size, location, or other metrics, all companies benefit from EPLI.
Protect Your Business with the Best EPLI
Each business makes decisions every day to sustain its operation. You decide who to hire, fire, promote, and their compensation. Each of the decisions affects your staff.
How the decisions affect the employees determines whether your employees file claims. Employee claims can damage your reputation or make your business obsolete.
No matter the size of your business, you need employer protection liability insurance. Your business is your baby; you need to protect it at all costs. With an employment practices liability policy, you can focus on business growth.
If you are looking to improve coverage for your business, contact and insurance agency that specializes in business insurance www.centralcarolina.com.