We live in a litigious society. These days, it is difficult to terminate employment or run a business without the risk of a lawsuit. More and more people in this country are suing employers for wrongs, whether real or perceived, and companies, particularly small businesses, are paying the price. Your business policy’s liability insurance may not protect you from this sort of lawsuit. Instead, you will need employment practices liability insurance.
When shopping for a policy, you may be able to benefit from the assistance of Trapp Insurance Group We have relationships with several different insurance carriers so we can easily provide you with a variety of competitively-priced insurance policies for your review.
Employment practices liability insurance, commonly referred to as EPLI insurance, is specifically designed to protect employers from lawsuits brought on by employees. It provides coverage for many situations that general liability insurance does not.
Even lawsuits that are thrown out of court or are won by your company are expensive, due to the high cost of securing legal defense. Therefore, this insurance coverage is very important as financial protection for your business enterprise.
EPLI insurance will provide compensation for losses caused by employee lawsuits, including all incurred court costs and legal fees.
While frivolous lawsuits commonly happen, many petitioners do have legitimate claims. Even if your company does not intentionally violate employment laws, you still can be held liable. For this reason, it is particularly important to have a well-written employee handbook and policies and procedures manual available, and to ensure that employees adhere to the established guidelines.
Some examples of reasons that a lawsuit may be filed against your company include the following:
Even if an employee’s termination had nothing to do with any of these situations, if a judge is convinced otherwise, your company may be held liable for lost wages and punitive costs.
Another employee lawsuit that is showing up in courts involves invasion of privacy. This usually occurs if employees feel they have been wronged as a result of cyber-snooping or video monitoring. This type of claim is not covered under most EPLI policies, but you may be able to get coverage through a newly created cyber liability and network security policy.
The cost of EPLI insurance coverage will vary from one company to another. Some factors that may influence cost include:
In general, a company with about 25 employees can expect to pay anywhere from $2,000 to $4,000 a year for a policy. While this cost may sound rather high, is it far lower than what legal fees alone would cost for just one lawsuit. The only way to know for certain how much it will cost to cover your company is to request rate quotes from a variety of insurance companies, which you can do through us.
Companies are vulnerable to lawsuits brought on by their employees. The most vulnerable are small companies that cannot afford their own in-house legal team and must pay the high costs of legal defense.We can help you make certain that you are adequately covered against this threat.
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