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What is Employment Practices Liability Insurance?

Employment Practices Liability Insurance (EPLI) is an essential form of insurance for businesses of all sizes. This type of coverage protects companies from claims made by employees regarding wrongful termination, harassment, discrimination, and other employment-related issues. Employment Practices Liability insurance responds to specific employment exposures including but not limited to:

  • Sexual Harassment
  • Constructive Dismissal
  • Employment Related Misrepresentation
  • Hostile Work Environment
  • Defamation
  • Wrongful Termination

Following established human resources practices can assist in mitigating exposures but can’t eliminate them completely. This coverage can help protect businesses from the financial consequences of lawsuits related to discrimination, harassment, wrongful termination, and other employment-related claims. An Employment Practices Liability policy arranged by AC&D provides broad coverage for companies against the financial impact of employment related actions.

Why is EPLI important for businesses?

As a business owner, you want to create a positive work environment for your employees. However, despite your best efforts, disputes may arise. EPLI can help protect your business from the financial consequences of employee claims related to employment practices.

Without EPLI coverage, your business may be exposed to significant financial risk in the event of an employee lawsuit. EPLI provides a safety net for businesses facing employment-related claims, which can help ensure your company's financial stability and reputation.

For many small and medium businesses it isn’t possible to have a full time dedicated human resources expert who is able to assist you in making the correct business decisions around such matters as creating binding and enforceable employment contracts, accommodating staff with health issues, and managing the workforce. As a result, employment related issues can sometimes become an unexpected, and expensive, problem for your business.

Addressing this problem is two-fold. First, it is important to have the services of a qualified legal expert who is knowledgeable and practices in matters related to employment law. Second, an insurance policy can protect you from unexpected litigation arising from employee relations.

What does EPLI cover?

EPLI coverage typically includes claims related to discrimination, harassment, wrongful termination, and other employment-related issues. This type of insurance can provide coverage for legal defense costs, settlement or judgment fees, and other associated expenses.

EPLI coverage may also include coverage for claims made by third parties, such as customers or vendors, alleging employment-related misconduct by your employees.

The following claims examples provide common scenarios where a claim may occur under an employment practices liability policy.
 
Note: These Claims Examples are for illustrative purposes only. Please remember that only the insurance policy governs the coverage terms, conditions and exclusions.

Hostile Work Environment

  •  Allegations were made by an employee that his employer had created a hostile work environment by failing to deal with bullying co-workers.

 

Defamation Liability
  •  A senior employee, whose employment was terminated, sued several directors for defamation following the publication of an “all staff” memo describing the termination.

 

Discrimination Liability
  •  An organization was faced with a complaint brought under human rights legislation by an employee who alleged that she had been discriminated against based on her race, colour, ancestry and ethnicity.

 

Wrongful Termination Liability
  •  A senior executive’s employment was terminated after allegations of sexual harassment were made against him by another employee of the organization. The executive sued his former employer for wrongful termination.

How much does EPLI cost?

The cost of EPLI coverage varies depending on a variety of factors, such as the size of your business, the industry you operate in, and the level of risk associated with your company's employment practices.

However, the cost of EPLI is often much lower than the potential cost of an employment-related lawsuit. Investing in EPLI coverage can help protect your business from significant financial risk in the event of a lawsuit.

If you are interested in learning more about Employment Practices Liability Insurance and how it will protect your business, please Contact Us to speak to annexperienced insurance agent who can help you determine the right coverage for your business needs..

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action, based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. We recommend contacting an employment lawyer wif you require legal advice.



Complete as much of this form as you like. If you would prefer to have an application sent by email or speak with a qualified broker directly, please complete the contact information only and click the submit button at the bottom of the form.

Legal name of entity or entities to be insured.
Preferred Method of Contact:
The Officer designated as agent of the Company and of all Insured Persons to receive any and all notices from the Insurer or their authorized representatives concerning this insurance.
Business Entity Type:
For example: Accounting Firm, Restaurant, Law Firm, etc.
How many years has the company been in business?
Is training provided to employees regarding discrimination and bullying/harassment?:
Is the ENTITY currently considering or has it in the past three years been involved in any acquisitions, mergers or majordivestitures?:
Does the ENTITY use seasonal employees:
Has the turnover rate exceeded historical levels during the past two years?:
Are any layoffs, staff reductions, or plant, branch or office closings anticipated within the next two years?:
Does the Company make use of independent contractors:
Does the Company require the submission of an employment application for all applicants?:
Does the ENTITY have (check all that apply):
Does the Company have a Human Resources Department?:
If you have a human resources manual, does this manual contain policies and procedures addressing the following areas (check all that are applicable):
Are all employees provided with and required to acknowledge receipt of a handbook that addresses the areas detailed in the human resource manual:
Do all managerial and supervisory personnel (check all applicable):
Does the ENTITY use outside legal counsel for employment advice?:
If outside legal counsel is used, are they consulted prior to discharging an employee?:
Have there been during the last five years, or are there now pending, any employment related civil, criminal, administrative or arbitration proceedings (including any proceeding initiated before any provincial or federal human right commission or tribunal and/or the Equal Employment Opportunity Commission) brought against the Company or its Subsidiaries or any person proposed for this insurance in their capacity as either Director, Officer, or employee of the Company or its Subsidiaries?:
Have there been during the last five years, or are there now pending, criminal, administrative or arbitration proceedings by any customer, client or other third party against the Company, its subsidiaries or any person proposed for this insurance alleging discrimination, harassment or violations of civil rights based upon discrimination or harassment?:
Is the person completing this application or any Director or Officer proposed for this insurance aware of any fact, circumstance or situation involving the Company or its Subsidiaries which he or she has reason to believe might result in any future Employment Practices Claim?:
Typical limits available are $500,000; $1,000,000; and $2,000,000
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