EPLI: An Underutilized Tool To Manage Employment Risk

Over the years, the number of claims against which Employment Practices Liability Insurance (EPLI) protects has risen along with unemployment rates. Yes, unemployment rates are currently low, but by obtaining coverage now an employer can protect itself against a possible uptick. In fact, EPLI is often an underutilized tool for employers to manage employment law risk.

Specifically, by obtaining employment practices liability insurance,  employers can protect themselves against the following frequent types of claims, among others:

• Wrongful termination,
• Discrimination,
• Retaliation, and
• Harassment, including sexual harassment.

EPLI can either be purchased as a stand-alone form of coverage, or added to an existing policy as an endorsement. However, it is important to note that certain kinds of claims are often excluded from coverage:

• Bodily injury,
• Claims related to willful, wonton, or reckless behavior, and
• ERISA claims.

Of course, there are other steps employers can take to guard against claims for discrimination, retaliation, and harassment, among other things. Employers should create and communicate clear, comprehensive anti-discrimination, anti-retaliation, and anti-harassment policies. These policies should be incorporated into the employer’s employee handbook and updated as applicable laws change, and employees at all levels should be trained to ensure compliance.

Up-to-date policies and proper training can not only help to prevent claims from arising – they may be required under an EPLI policy. In order to confirm that proper, preventative steps are being taken, an EPLI provider may ask to review an employer’s handbook, along with other employment forms.

For more information about EPLI policies, and for advice on how to protect your company, please contact Gregory Tumolo, chair of Duffy & Sweeney’s employment law practice group, at gtumolo@duffysweeney.com or (401) 455-0700.