Employment-related claims can affect businesses in Florida of almost any size or type (including restaurants and law firms) and are becoming an increasing concern for business owners nationwide. If you are worried about protecting your business against certain claims involving employees and employment practices, Employment Practices Liability Insurance (EPLI) can offer you coverage that would cover legal expenses in various situations. Let’s discover what EPLI is and what type of businesses could benefit from investing in this type of insurance coverage.
What Is Employment Practices Liability Insurance?
Employment Practices Liability Insurance (EPLI) is a type of business insurance policy that covers defense costs and damages to your business from employment-related claims. Coverage varies by policy, so always check the fine print carefully, but incidents this insurance may cover include wrongful termination, harassment, retaliation, and discrimination. This type of insurance is different from other insurance policies you may already have, such as workers’ compensation insurance, which covers work-related injuries and illness but won’t cover employment practice claims. General liability insurance also doesn’t offer the same coverage and is designed to cover third-party claims.
What Does EPLI Typically Cover?
EPLI can cover many different types of incidents, depending on the policy you take out. If you are taking out this coverage for a specific concern, always read the policy carefully before committing to an insurance provider. Common employment-related claims that this insurance type can support you with may include:
- Wrongful termination
- Discrimination
- Workplace harassment
- Retaliation
- Failure to promote
- Certain hiring-related claims
What May Not Be Covered?
As with any type of insurance, EPLI policies often come with exclusions and limitations. Possible exclusions may include intentional acts, contractual obligations, and certain wage-and-hour claims. When you start to consider taking out EPLI insurance, we encourage business owners to review their specific policy terms to ensure they meet your expectations and offer you enough coverage for the type and size of business you own or operate. Our team can support you with this task if it is your first time taking out EPLI and share with you the best option for your unique needs.
Who Should Consider EPLI?
While any type of business could benefit from EPLI, we highly recommend it for certain types and sizes of business. Small and midsize businesses with employees should consider EPLI, as they are exposed to a wide range of potential incidents. If you are a growing company adding staff members to your team, this is a good time to reassess your insurance coverage and invest in EPLI. Businesses with managers or supervisors should also get EPLI, as should companies that regularly hire, terminate, or promote employees. The more people involved in your business, the more open you are to incidents such as harassment and discrimination, making additional coverage essential to protecting your business’s future.
Why EPLI Matters for Florida Businesses
As a Florida business owner, employment disputes can result in significant legal expenses that could destroy all of the hard work you put into running your business each and every day. Growing or changing workforces can increase employment-related exposure, and Florida is known for high employee turnover. We encourage employers to periodically review their coverage and risk-management practices to ensure they still serve you well as your company expands or changes. You should do this insurance and risk review at least annually to ensure you remain protected from unforeseen circumstances.
Ways to Reduce Employment-Related Risk
While EPLI is an excellent tool to help add an additional layer of protection to your business, there are also steps you can take as a business owner to reduce employment-related risk. Maintain clear workplace policies at all times, and share them with new employees during onboarding sessions. Train your managers and supervisors on these policies to ensure they lead by example at all times. They are the members of your team who interact with your employees daily and can guide individuals who may need additional support to prevent situations from escalating.
When you are faced with important employment decisions, document all of these so that you can refer back to them in the case of a claim or incident in the future. This is a procedure you should have in place across your management team to protect everyone involved in any incident. Establish clear procedures for employee complaints so employees feel empowered to speak up when needed, before issues build up and spiral out of control. Regularly review your employment practices to ensure that they are aligned with your current business practices and are still serving you well for your current business operations.
Is EPLI Right for Your Business?
Whether EPLI is right for your business depends on your needs, including workforce size, industry, hiring practices, and existing coverage. We encourage business owners to evaluate their employment-related risks and current insurance to ensure that it covers all possible incidents you may face. If you think you are at risk for any of the concerns we shared above, it may be time to consider upgrading your insurance coverage and adding EPLI to your current policies.
Talk to Lovinger Financial Services About EPLI
As you can see, investing in EPLI offers many advantages and an additional layer of protection for your business. At Lovinger Financial Services, we can help you evaluate your commercial insurance needs and suggest ways to improve your coverage to protect your business for years to come. Are you looking for more information about EPLI? Contact our team today at Lovinger Financial Services to learn more about EPLI coverage or to discuss any questions you have about this type of insurance.