Employment practices liability insurance
Employment practices liability insurance (EPLI)
Employment practices liability insurance covers legal expenses if an employee sues your company over harassment, discrimination, or another violation of employee rights.
When do tech companies need employment practices liability insurance?
Employment practices liability insurance protects tech companies if an employee sues over work-related issues.
This means small tech businesses don’t have to pay legal costs, including judgments, out of pocket when an employee or group of employees claim their rights have been violated.
What do I need to know about EPLI?
EPLI is usually offered as a claims-made policy. This means that the insurance has to be active both when the incident of wrongdoing was filed and when it took place.
Some insurance providers insist on choosing your attorney if a claim is filed. That’s because they want someone with a background in workplace issues on the case to give your small business the best results and protection possible.
EPLI protects tech companies accused of:
- Discrimination
- Wrongful hiring / firing decisions
- Mismanagement of benefits
- Breach of employment contract
- Privacy invasion
How much does employment practices liability insurance cost?
Premiums for EPLI vary depending on the specifics of your tech business. Relevant factors include:
- Your profession’s level of risk
- Policy limits you choose
- Policy deductible you choose
- Number of workers at your business
- Past claims history
How can I save money on employment practices liability insurance?
To save small tech businesses money, insurers often suggest pairing EPLI with directors and officers insurance (D&O). EPLI and D&O are different types of management liability insurance. D&O protects a tech company’s board members and officers from getting sued over decisions they made on behalf of the company.
A management liability insurance bundle protects your business and its execs from a wide range of liabilities related to decisions about employment, management, and finances.
Why purchase employment practices liability insurance?
Employment practices lawsuits are increasingly common for tech businesses. In fact, you're now more likely to be sued by an employee than have a fire at your office.
If your business is too small to have a human resource team, you could face these lawsuits even more frequently. Businesses without human resource teams often lack the time, energy, and expertise to resolve employee disputes before they become legal issues.
Employee lawsuits can have a devastating effect on your business's reputation and finances. Small to medium-sized businesses pay an average of $160,000 to resolve these types of lawsuits.
You shouldn't have to pay these costs out of pocket. EPLI can cover your legal defense, including any settlements or judgments, when current, former, or potential employees sue your business over employment disputes. And it protects your business even if the claims against you are insufficient or fraudulent.