What is Employee Practices Liability Insurance And Does My Business Need It?

///What is Employee Practices Liability Insurance And Does My Business Need It?

Is your business fully covered for any scenario? A single lawsuit, even if it doesn’t go to trial, can cost you your business, so it is important that you and your business are both protected from any claims of wrongdoing. Employee Practices Liability Insurance is one such policy to cover your bases.

What is Employee Practices Liability Insurance?

Employee Practices Liability Insurance provides coverage against financial loss and legal fees if you are ever sued by a current or previous employee or contractor, including part-time or temporary employees. This coverage includes claims made against the business, management level employees, or other employees for

  • Wrongful Termination
  • Sexual Harassment
  • Discrimination
  • Retaliation Claims
  • Deprivation of Career Opportunity

Employee Practices Liability Insurance protects against claims made by individuals you currently employ as full-time or part-time employees. It also covers claims made by contracted employees, temporary employees, and job applicants or candidates. Employee Practices Liability Insurance can also protect against claims made by vendors.

Can’t Workers’ Comp Insurance Cover These Employee Claims?

No. A common misconception is that Workers’ Comp Insurance protects against any claim made by an employee. In reality, Workers’ Compensation only provides coverage against employee injury or illness caused by performing a work-related task. Employee Practices Liability Insurance helps fill the gap between injuries and other claims or allegations made against your company.

Who Needs Employee Practices Liability Insurance?

Any business with any number of employees, contractors, or vendors should consider purchasing Employee Practices Liability Insurance as part of their business coverage. Allegations can be made regardless of truth, and your company will have to suffer the costs of legal expenses in order to clear their name. If you lose your case, company assets are at risk for being used to pay for the settlement, and for many business owners, that would mean the end of their company. It’s best to side on the side of caution and protect you and your company from allegations of wrongful termination, discrimination, or sexual harassment and more.