EPLI – The Coverage Your Business Needs
What a time to be alive, right?
Every which way that you look you end up finding out one of your favorite celebrities isn’t what you thought they were. With all of the celebrity sexual harassment news coming out in the media, employee practices liability insurance (EPLI) coverage has never been more relevant. These sexual harassment claims are not only happening in Hollywood between celebrities and high profile individuals. Every business with employees can be impacted. EPLI is not limited to just sexual harassment claims either; it provides coverage for a number of different offenses. Below are examples of the of the types of claims that can arise in the workplace that EPLI will help protect you from:
- Sexual Harassment. As mentioned earlier, this example has become more and more prevalent in the media. Sexual harassment claims can arise in a number of scenarios in the work place. One of the more obvious examples of this type of claim could involve an employer who offers an employee a raise or promotion contingent upon acceptance of the employer’s sexual advances. However, these claims do not have to be so obvious. A sexual harassment claim can arise from unwarranted or inappropriate touching of employees in the workplace, or even inappropriate language. Talking about racy topics that are not suitable for work can offend fellow employees and result in an EPLI claim. These scenarios are not even limited to employee-on-employee. They can occur between employees and customers and employees and vendors, which is exactly why it is also important to make sure your EPLI policy has third party coverage.
- Wrongful Termination. Wrongful termination is another hot issue in the workplace and covers a number of different scenarios. This occurs when an employee claims the company has fired them without a legitimate reason. One of the more frequent scenarios in which this occurs is when an employee claims they were fired due to filing a workers compensation claim. Often times, when employees who recently return to work after being out because of a workers compensation claim are fired, they claim wrongful termination stating the only reason they were let go was due to the claim they filed against their employer. Another frequent instance is a similar scenario where a woman is fired after returning from Maternity leave. After returning from maternity leave, a woman who is fired may file a wrongful termination claim stating the reason she was fired was that the company held the time she took off for maternity leave against her. A third, and less frequent, example could be a scenario where an employee is fired for refusing to commit an illegal act as directed by their employer.
- Failure to Promote. Failure to promote claims in the workplace often go hand-in-hand with discrimination claims when they are filed. Though it is pretty self-explanatory, this occurs when an employee feels they were the most qualified candidate, but were denied a promotion or advancement. The reason they are so frequently combined with discrimination claims is because the employee will often states the reason they were denied advancement was due to a variety of discriminatory reasons (sex, age, race, religion, looks. etc.). For example, a qualified woman claims that the she did not receive a promotion over a man is because the employer is sexist. This example can be used in many different scenarios. I can think of another example involving an older employee not getting a promotion over a young employee, or an example involving a minority not receiving a promotion over a caucasian. Claims like this are very common, and are often made with good merit.
- Defamation. These claims can arise from any written or oral communication about a person that is untrue and unfavorable. It is no newfound secret that the office can be a hot bed for gossip, and if an employee finds out that rumors are being spread about him or her, or e-mails have been passed around that are untrue and offensive, they can file a claim.
- Negligent Evaluation. These claims stem from an employee feeling that an employer’s evaluation of their performance was inaccurate, excessively negative, unfairly low, or was not reflective of their true, higher level of performance. Many companies do hold yearly reviews for their employees, so it is easy to see how these claims can arise in the work place. This is another claim scenario that is often accompanied by a discrimination claim.
The main key message to take away from this list of unfortunate workplace scenarios is that EPLI claims can arise from the slightest of employer missed steps in the workplace. EPLI coverage can be extremely valuable to a company in protecting against situations which are, typically, out of an Employer’s control. Having said that, as is true with any insurance policy, it is extremely important to thoroughly review the forms and coverages on your EPLI policy. Not all policies include the above mentioned coverages, and not all policies include the third party coverage, which I briefly explained in the sexual harassment example. It is also important to be aware of any policy sub-limits that may exist for certain coverages, as these sub-limits are actually limitation of limit comparative to the main limit on your policy and can be misleading to the policy holder in terms of how much actual coverage you have on your policy.
As always, I hope you have learned something useful from this article. If you have any further questions about how EPLI coverage can impact your business or would like to obtain a quote, please feel free to give us a call. We would be more than happy to help in any way we can!