Employment Practices Liability: What It Means And Why It's So Important



Modern society is highly litigious. This is also true for businesses that have to deal with lawsuits filed by their employees. In fact, increasing cases of employment related lawsuits is a major concern for all types of employers. To deal with such situations, it’s best to depend on employment practices liability insurance from https://www.icnj.com/employment-practices-liability/. If you lack adequate information about employment liability and the coverage thereon, read below to understand the topic thoroughly.

What Is Employment Practices Liability?

It is a section of labor law that takes care of wrongful termination, discrimination, sexual harassment, privacy invasion, breach of contract, emotional distress, false imprisonment and violations related to wage and hour law. It is the duty of every employer to act in a just and fair manner with the employees. Failure to do so can invite serious punishments and penalties under the law.

Although most of the employers adhere to the law and treat their employees fairly, there are instances when a lawsuit related to employment practices may arise. To deal with such scenarios, employers can buy the employment liability coverage.

What Is Employment Practices Liability Insurance Or EPLI?

It is an insurance policy meant to cover the risks of employing against common employment centered lawsuits. This vital coverage provides protection against court cases claiming discrimination in hiring practices and treatment of employees during their employment tenure. The variations of claims covered by EPLI are wide; it includes the following.

  • Discrimination - Not treating employees equally who are members of a particular protected class.
  • Wrongful termination - The termination of an employee for an invalid reason.
  • Sexual harassment - The exposure of an employee towards unwelcome sexual advances, offensive or obscene comments, or fail to avoid such behavior.

Aside from offering the necessary resources for defense or claim settlement, the coverage also protects employers against baseless lawsuits. It is likely that some employees may mistake the employer for negligence of their duty towards them. Also, some employees willingly file baseless cases to extort money from their employer. The EPLI policy covers employer against all such sites as well.

Additionally, businesses require this kind of coverage for many other reasons. The reasons vary from one industry to another and according to the team of management. However, some of the common reasons for investing in this vital policy include recouping the cost of litigation, mistakes in handling employees/people, settlement expenses and understanding the complexities of the employment law and related legal issues.

There are many factors that make a reason to invest in the EPLI coverage. Most of the factors have to do with the recession. Employees are more likely to file a lawsuit if they are removed from their jobs as a result. In such cases, the decision is economic in nature. However, certain decisions of employee-termination are emotional.

Protecting your venture against employment related lawsuits is important to avoid potential financial disaster and ensure smooth running of your enterprise. Just get familiar with the EPLI coverage and buy a suitable policy accordingly. With a handy insurance policy by your side, dealing with employment centered liability become easy and hassle-free.