Employment Practices Liability Insurance provides protection for your entity from claims / lawsuits alleging sexual harassment, discrimination, wrongful termination, and other defined employment-related allegations.
Employment Practices Liability Insurance, often referred to as EPLI coverage, has evolved over the past decade or two. More employers are aware of its importance simply through high-profile court cases that have awarded millions of dollars to employees.
It is important for an employer to note employment laws such as:
One key provision of 1991 Act was the requirement of a jury trial for most alleged types of work-related discrimination, if desired by the plaintiff employee. This set the tone for the expansion of Employment Practices Liability Insurance.
In the 1990s, several insurance companies developed Employment Practices Liability insurance policies as a stand-alone product or by endorsement to a Directors & Officers policy. Simply adding the EPLI coverage to the D&O policy proved to be fairly ineffective. EPLI is more "claims frequency" oriented while D&O is more "severity" oriented with less claims frequency.
Both exposures are subject to the policy aggregate limit. A D&O claim can exhaust the policy's aggregate limit, which would leave you without any available coverage for EPLI exposure. Also insurance carriers monitor EPLI claim experience which can jeopardize D&O renewal when both exposures are covered on the same policy.
For above reasons, insurance carriers can provide a stand-alone EPLI Insurance Policy to your firm.
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Answers about the plan, including eligibility, options, enrollment, customer service and more.
Can employment practices claims apply to my company even if we have fewer than 15 employees?
Yes. The accusation of a wrongful discriminatory act may be cause for legal action regardless of the number of employees you have.
If I use contract employees, could I still have employment practices liability?
In addition to the claims by full-time employees, EPLI policies typically include claims by part-time, seasonal, leased and temporary employees. Claims by independent contractors may be offered upon your request and upon further underwriting review.
Isn’t this coverage available under a general liability policy?
With some exceptions, claims resulting from the above employment practices exposures are not covered under general liability policies. First, the majority of these acts are not accidental, so they are not considered occurrences. Also, the injuries they cause do not constitute bodily injury or personal injury as defined under general liability. Lastly, EPLI coverage occasionally provided under general liability policies is for very small amounts such as $10,000 or $25,000.
Isn’t this covered under my Workers' Compensation policy?
Workers' Compensation policies specifically exclude coverage for employment-practice issues. A sample exclusion from one policy states: damages arising out of coercion, criticism, demotion, evaluation, reassignment, discipline, harassment, humiliation, discrimination, against or termination of any employee; or any personnel practices, policies, acts or omissions are excluded.
What other insurance products are available to broker-dealer firms?
Mercer Consumer offers a variety of insurance products including Cyber Security Liability Insurance, Fidelity Bonds, Errors and Omissions Liability Insurance, Directors and Officers Liability Insurance, Property & Casualty Insurance, Mail Insurance, the Signature Guarantee Medallion Bond, 1st and 3rd Party ERISA Bonds and many more products. Please feel free to browse our site in its entirety for more information, or you may contact us directly at 1-800-978-6273.
How can I learn more about the insurance products offered by Mercer Consumer and how they can best serve my firm?