If you are a one-person shop, you don’t have to be concerned about employees. You probably want to grow and take on bigger projects, but until you do, enjoy the luxury of not having to supervise anyone else, or worry whether they will sue you.
If you already have employees, Employment Practices Liability Insurance can provide protection.
EPLI covers you for mistakes you might make when dealing with employees – and the fraudulent claims your workers may make against you.
This type of insurance is designed to protect against every kind of employee interaction that goes sour.
Here are some examples:
- Wrongful termination. Firing an employee is never easy and depending on your industry and specific circumstances, there are rules to follow. Whether you haven’t given enough notice, or enough chances to improve, or your worker is in a protected category, you can bet they are likely to know the law. Sometimes they sue.
- Deprivation of career opportunity. Did you promote your long-time friend over someone who thinks they had better experience? It doesn’t matter that you felt you could get along better with the guy you promoted. There is something about testifying in front of a judge that makes good ideas sound … not so good.
- Sexual harassment. More women are entering every type of job, which is a good thing. It also means all your male employees have to figure out how to treat coworkers with respect, no matter how it was in the old days when everyone made jokes about everything.
- Discrimination. See above.
EPLI can cover several other types of perceived discrimination. Its cost varies depending on the size and type of the business.
Unlike some forms of insurance, EPLI operates on a claims-made basis. That means if you drop the insurance and later a claim is made against your company, you won’t be covered. Also, while EPLI will cover the cost off defending a suit, those costs reduce the amount of the settlement that might be paid. You can buy EPLI coverage as a stand-alone policy or as a package with other insurance that protects the company, its executives and directors.
The best protection, of course, is to avoid getting sued. So in addition to insurance, train yourself and your staff in legal approaches to hiring, discipline and social interaction in the workplace.
It is tougher than ever to be a boss. EPLI can protect you from the unforeseen or easily avoidable traps you might walk into as you deal with your staff.
