Protect Your Business with Employment Practices Liability Insurance

Protect Your Business with Employment Practices Liability Insurance

It’s an understatement to say that we are currently living through tentative times. And the spate of harassment charges that have been making the news is an apt example of this state. As a business owner, you need to be more vigilant than ever in protecting the business from potential lawsuits that an employee may bring against you – regardless of whether the claim is true or false.

First, some statistics:

  • Over the past 20-years, the number of lawsuits brought upon an employer from an employee has risen 400%.
  • Almost 50% of these lawsuits are against businesses with less than 100 employees.
  • “Wrongful termination” is the leading cause of such lawsuits.
  • Discrimination, sexual harassment, and retaliation are three other highly-probable employer-employee events that can trigger legal action.

And the costs this can incur on your business is substantial. Settling a claim out of court costs $75,000 on average, with the average cost if a jury sides with the employee of over $217,000.

What is a Business Owner to Do?

First and foremost, no matter how small your business is, you need to have an employee handbook that clearly outlines policies on everything from harassment to social media use to how one represents your business in public.

The next thing to do is consider the purchase of Employment Practices Liability Insurance (EPLI) for the business. EPLI can protect your business from charges and liabilities associated with harassment, discrimination and wrongful termination… whether it be for legal fees only or additionally for the settlement of a claim associated with losing the suit.

Think Beyond Your Employees

Another scenario to consider is a third party pursuing an EPL claim. Vendors, customers, clients or any other entity that interacts with your business could experience – or claim to have experienced – an incident would be covered by the EPLI as long as you include this coverage in your policy.

An Emboldened Workforce

Federal and state policies encompassing employer-employee relations have in a sense emboldened the workforce. People have seen too many times that even a frivolous claim can be a windfall for the employee, customer or vendor. One needs to simply Google “most ridiculous lawsuits against a business” to see how exploitative some people can be.

And whether these people won or lost the suit, the businesses still had to pay – in legal fees, in lost productivity, in being associated with negative publicity, or simply in just scarring the company culture.

To learn more about why an Employment Practices Liability Insurance policy is right for your business, contact me at or call (614) 235-1111.