Business owners know the many risks involved in doing business. Property insurance protects your building against fire and weather events, and workers' compensation helps your employees if they get injured on the job.
There are many liability concerns to consider as well. General liability and errors and omissions insurance protect your business from legal fees and settlements when clients allege a financial loss due to damages or professional errors by your employees. None of these policies, however, protect your organization against claims made by employees who feel they have been mistreated.
Liability Coverage for Employment Practices
Employment practices liability insurance (EPLI) protects your company if a current or former employee files a claim for many reasons, including:
- Discrimination - If an employee claims they were treated unfairly due to their age, gender or race they may sue.
- Failure to hire - Someone who claims they weren't hired because of their protected class status under the Americans with Disabilities Act may file a claim. Protected classes include those who are blind or hearing impaired, among many others.
- Harassment - Sexual harassment is the most common form, but anyone who feels they have been harassed by another employee may file a claim.
While you certainly hope an employee never files an employment practices claim, not being prepared could be devastating to your business.