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Employment Practices Liability

What is EPL Insurance?

  • EPL protects the company against damages for events relating to their workforce including, but not limited to, wrongful terminations, harassment, discrimination, defamation and unfair hiring/firing practices.
  • EPL provides defense costs associated with responding to employment related lawsuits.

Why Buy EPL Insurance?

  • Settlements can have a significant impact on the company’s financial stability.
  • The average cost to defend an EPLI claim is $150,000, with average award at $250,000.
  • 40% of all claims are against companies with less than 50 employees.
  • 65% of terminated employees file an EPLI claim.
  • The cost to defend against employment litigation is high regardless of the outcome.
  • An employment lawsuit, if not handled properly, can cause irreparable harm to a company’s reputation.
  • Employers are facing increasing legal obligations while managing their workforces.
  • Increased awareness and visibility of employment related lawsuits.
  • Lawsuits based on language in employee handbooks and other written policies and procedures are increasingly common.
  • Compliance with ever changing laws in the workplace is costly, requires expertise, monitoring and training.
  • Commercial General Liability policies are not adequate to respond to EPL Matters.

Sample EPL Claims Examples

  • Fair Labor Standards Act (Wage and Hour)
  • Race, Sex and Disability Discrimination
  • Regulatory Violations
  • Government Investigations
  • Intentional Misrepresentation
  • Whistleblower
  • Wrongful Termination
  • Sexual Harassment
  • Illegal Employment Practices
  • Defamation
  • Hostile Work Environment
  • FMLA Violations

Actual Claims

An employee sued a company for discrimination in violation of Title VII, which prohibits employment discrimination based on race, color, religion, sex and national origin. The employee alleged that he was wrongfully terminated when he complained to his supervisors that co-workers had made disparaging remarks relating to his ethnic background. The plaintiff was awarded $250,000 in damages.

A sales clerk sued the seed company she worked for, alleging sexual harassment and retaliation. Specifically, she claimed that her manager had sexually harassed her and that, after she complained, she was transferred to a different store and was fired. The claim settled for $150,000.

A class-action suit was brought against a Medical Lab, when employees sued for unpaid overtime wages and retaliation. The plaintiffs alleged they were due overtime pay and were terminated. The resulting claim was settled for $2,500,000.

A former Miller Brewing Company executive was awarded $26,600,000 by a Wisconsin state jury for wrongful termination. He was terminated after a female colleague complained about his recounting of a racy episode of the Seinfeld television show at the office. The jury found that the incident was not sexual harassment. Miller argued that it made its decision to fire the executive due to his poor performance. However, the jury did not afford this explanation any credibility.

A 63 year old school administrator was terminated for cause, as a result of missing 15 days of work due to illness. The employee sued for age discrimination and was awarded $55,000 in damages. The school district was found to be in violation on its own policy regarding sick leave.

Let Us Help

Call ECC today and let our team of professionals work for you. ECC can design a program specifically for your client including limits, coverage and services that will exceed your expectations. Package policies are competitively priced including D&O, EPL, Fiduciary Liability, Crime and E&O. Target classes include Public and Private Companies, Start-up Ventures, Energy Cooperatives and Financial Institutions.

Agent Sales Tips

The best way to sell EPLI insurance is to start a conversation with your client or prospect. Think about using these tools:

  • Develop a one page sales or marketing sheet about EPLI coverage.
  • Offer to review HR policies.
  • Develop conversation talking points.
  • Have you ever had any employment issues?
  • Do you have the resources to manage a claim on your own?
  • What do you think the cost of hiring an experienced EPLI attorney is?
  • Use compare and contrast questions.
  • If you had a claim without insurance, how you pay for it?
  • If I could design the right combination of price and coverage, would that be of interest to you?