Employment Practices Liability Insurance

Employment Practices Liability Insurance (EPLI) is a type of liability insurance that usually protects the insured employer against claims of gender, age, pregnancy, or other discrimination; wrongful termination or discipline; sexual harassment; wage and hour law violations; breach of employment contracts; invasion of privacy; defamation, false imprisonment; intentional infliction of emotional distress; and negligent infliction of emotional distress.

Generally, employment practices liability deals with the rights of employees under the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act (ADA) of 1990, the Age Discrimination in Employment Act (ADEA) of 1967, and the Family and Medical Leave Act (FMLA) of 1991. The Equal Employment Opportunity Commission (EEOC) interprets and enforces these laws. They are effectively, the prosecutor, the judge, and the jury. The EEOC has jurisdiction over employment practices dealing with age, disability, national origin, race, color, religion, genetic information, equal pay, retaliation, sex, and sexual harassment.

California is the most pro-employee state in the nation when it comes to employer liability making the need for EPLI a necessity.

Similar to most types of professional liability coverages, EPLI policies operate on a claims made basis meaning that policy holders can only receive benefits if they are covered both at the time of the incident and at the time when the claim is made.

The cost of EPLI coverage depends on the type of business, the number of employees, the dollar amount of coverage, the deductible, and whether the business has adopted proper personnel policies as set forth in a written employee handbook.

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