In October of 2017, society and the media as we knew it turned a pivotal corner. A corner of otherwise privately endured embarrassment, shame and scorn as a direct result of the reprehensible acts of sexual misconduct, harassment and assault suffered by many of Hollywood’s most well-known actors became highly publicized. This immediately shook up the lives of some of the industry’s largest moguls, as the #MeToo movement rocked the worlds of many, bringing to light the dark side of the industry (and big business as a whole), with an unwillingness to accept anything less than justice, respect and equality going forward. Along with the widespread reactions and support for #MeToo came an increase in the number of similar cases being reported and lawsuits in relation to EPLI on the rise from small business to the corporate world.
Employment Practices Liability, also known as EPLI, is a specific type of liability insurance designed to cover wrongful acts arising from the employment process. These wrongful acts can be anything from discrimination, sexual harassment and retaliation to employment-related defamation, invasion of privacy, failure to promote and negligent evaluation. Wage and hour dispute related claims can also be included depending on the carrier’s offering availabilities.
Although the positive reactions and perception of #MeToo are innumerous as women who had been silenced have been given a new voice, the bar is now set far above where it had been in the past for young women entering the workplace. Currently achieving a higher level of respect and intolerance for such behavior along the way, a well-run corporation is still always at risk of having a ‘bad seed’ from which an unjust lawsuit could be brought against the entity.
For this reason alone, as long as you employ personnel, EPLI coverage should be seriously contemplated.
The proper way to obtain this coverage full circle is to have a separate, standalone policy in place for EPLI. This way, you have the ability to obtain the most comprehensive coverage forms with the least limitations. In some cases, an insurance carrier is able to endorse EPLI coverage onto an existing package policy; however be aware that there are restrictions to the breadth of the coverage included, the coverage limit and the defense costs will likely always be included within the limit, hence reducing the settlement by this amount. With a separate EPLI policy and a trusted agent who is fully aware of your business entity needs, you can be sure to be protected to the best capacity.
Most importantly, it is vital to know that this coverage is an absolute exclusion under a general liability policy and insurance carriers will not pick up even the cost to defend you in a lawsuit when it is in relation to an ‘employment practices’ scenario such as stated above.
About the Author
Lauren Nicholson is an account executive for Storage Insurance Brokers, a national self storage property and casualty insurance program and division of World Insurance Associates, LLC. World Insurance serves more than 23,000 customers from 15 offices in NJ, PA, NY, CT, RI and FL and places more than $170 million per year in annual premium. Visit StorageInsuranceBrokers.com for more information.