Employment Practices Liability (EPL) Insurance

By Janice Berthold, Heffernan Insurance Brokers

Employment-related lawsuits are a growing concern for employers of all sizes, including home-based businesses. Heffernan Insurance Brokers can help you manage all your business risks, including employment practices.

What is Employment Practices Liability Insurance?
Employment practices liability (EPL) insurance is a policy used to cover your risks due to some of the most common employment-related lawsuits, including the following:

• Wrongful termination: The discharge of an employee for invalid reasons.
• Discrimination: The denial of equal treatment to employees who are members of a protected class.
• Sexual harassment: Subjecting an employee to unwelcome sexual advances, obscene or offensive remarks, or the failure to stop such behavior.

EPL works to provide the necessary resources to defend your company against a lawsuit or to pay for a claim. To best understand how to cover your EPL risks, it’s important to know the potential sources:

• Recruitment practices
• Annual conduct reviews
• Employment applications
• Enforcing performance policies
• Employment offers
• Termination
• Employee orientation process
• Improper documentation of the items listed above

Additional Information
Evidence of desirable employment practices and policies may be required for an EPL policy, and will certainly help defend against a suit (even for a small, homebased business with only a few employees). The underwriter may require a copy of the following policies to show that you are taking steps to reduce your risks:

• Sexual harassment
• Disability and accommodations
• Equal opportunity
• Employee discipline
• Termination
• Performance evaluations
• Internet usage/employee privacy
• Leaves of Absence
• Internal job postings
• Hiring and interviewing
• Discrimination
• Resolution/arbitration

Avoid a Lawsuit

As costs for litigation and damage awards climb, experts predict that employment liability will only become more complex. As a result, it is critical for business owners to understand their exposures and options for managing risks.


About the Author:

Janice Berthold is a Senior Vice President with Heffernan Insurance Brokers. Prior to merging her firm with Heffernan, Janice was President and CEO of J. Berthold Insurance Service Inc. and a Principal of All West Insurance Brokers, one of the top five closely held insurance brokerage firms in Silicon Valley. She is one of the few brokers who works with clients on a “Referral Only” basis. Janice has over 25 years of commercial insurance experience and holds the insurance designations of Professional Workers’ Compensation Advisor, Chartered Property Casualty Underwriter, Chartered Life Underwriter, and Chartered Financial Consultant. An Advisor for the California State Senate Committee on Insurance, she is a featured writer for the Business Journal.