Important EPLI Information

Please review this overview regarding Employment Practices Liability Insurance. There has been a large increase in EPLI claims resulting in large damages against privately held businesses. Your business is more likely to be hit with an EPLI claim then a general liability claim. The defense cost alone can be staggering.

 

Whether you employee a staff of 5 or 500 your business is at risk. The Equal Opportunity Commissions Enforcement stats reports that over 85,000 charges were leveled against businesses last year and these stats do not include non EEOC claims that are filed on a State and local level. The following table breaks down the most common types of claims:

                                                                  % of claims

Race....................35%

Sex......................31%

 Retaliation............27%

Disability..............20%

Age......................20%

These equal more than 100% because people file multiple charges.

 

It’s not just the high profile claims ($132 million settlement paid by Shony’s restaurant in a race bias suit, $66 million suit against AT&T for pregnancy discrimination) that impact the economy and the courts. Thousands of small businesses are sued every day. Examples include the following: 

 

Sexual Harassment  

An employee complains about racy emails that are circulated through the office. The employee is later terminated for poor performance and sues the company alleging sexual harassment, discrimination and retaliation. 

 

Discrimination

A wheelchair bound employee is dismissed as a result of a reduction in force layoff. She sues the employer, alleging that the employer discriminated against her in violation of the Americans with Disabilities Act. 

What you can do:

  1. Developing a comprehensive Employee Handbook is the necessary first step for employers to protect themselves from litigation. The handbook should include written policies on sexual harassment, discrimination, etc.

  2. Areas for Management to review should include job applications, interviewing, employee contracts, performance evaluations and disciplinary procedures.

  3. Obtain an EPLI policy that covers the corporation from both defense costs and settlements or judgments.

As with any legal document you should seek legal advice from your attorney.  This information is only for guidance.