Employment Practices Liability (EPL)
Employment Practices Liability (EPL) Insurance in New York State provides protection for you, as an employer, against allegations made by employees. This would include current, former and potential employees. EPL insurance covers discrimination, such as age, sex, race, or disability; wrongful termination of employment; sexual harassment; and other employment related claims in NY.
Claims for sexual harassment, wrongful termination and discrimination are continually on the rise. That means your business or practice is becoming more of a target for those seeking legal action in New York State. In fact, almost 75% of all litigation against corporations today involves employment disputes. Nearly 80,000 charges are filed yearly against employers under statutes enforced by the Equal Employment Opportunity Commission (EEOC).
It is important to note that your current business liability insurance in New York State may not cover employment liability claims. Standard business owners, or business package policies, generally have an exclusion for employment practices liability exposures. Some carriers have the ability to endorse and add EPL to your business owner’s policy, but you need to request the Employment Practices Liability coverage if not presented with the option. However, the coverage is still minimal at best.
At Parsons & Associates, we recommend any business in New York State with staff to carry a standalone EPL policy; rather than some coverage be added to an existing policy. Why? Claims are expensive and very time consuming. Your insurance limits and deductible will be combined if added to a business owner’s policy and may undervalue your insurance program.
From 1997 to 2007, the EEOC reports an average number of claims per year to be 74,000. Looking at 2008, the number has skyrocketed to more than 90,000 per year since. And these are just the claims that make it to the EEOC.
Don’t add your business to the growing statistics in New York! Call us today to discuss our insurance policy options that may include other important coverages such as Directors & Officers coverage, Fiduciary coverage, and Entity coverage.
Do you already have an EPL policy? It may not be giving you the protection you believe it is. Here are some items to look for when choosing or reviewing your policy:
- Broad definition of insured – from the entity to the directors/officers to the employees (present and former)
- Prior acts – does your policy protect you from an incident two or more years ago? Claims made insurance is very different than claims occurrence. For more details see our Glossary to educate yourself. You always want prior acts coverage on an Employment Practices Liability policy such as this.
- Exclusions – what is your EPL policy excluding? Wage and hour is a topic of high scrutiny since more employee complaints in a down economy in New York State include complaints of unfair compensation.
- Provisions – what is it that you are required to do in the event of a claim? Know your reporting requirements for your Employment Practices Liability policy and follow them closely to avoid a claim being denied.
- Risk Management Program – does your carrier/policy offer risk management tools such as a hotline to speak to a claim representative?
Click here for more detailed information on our Employment Practices Liability Programs
Click here for more information regarding Equal Employment Opportunity Commission.