Employment Practices Liability Insurance

Understand the Importance of Employment Practices Liability Insurance

As a business owner, many of your decisions affect your employees. Sometimes these decisions are upsetting, and workers will alleviate their frustrations by filing a claim against your business. This is why it is important for you to have employment practices liability insurance.

What Does an Insurance Policy Cover?

Liability insurance is designed to protect businesses against several types of claims, including:

  • Discrimination
  • Wrongful termination or discipline
  • Sexual or religious harassment
  • Wages and hours claims
  • Breach of contract
  • Emotional distress.

Insurance policies are used to protect director and officers, management personnel, and clients who are subject to the workplace environment. Coverage can also be extended to non-employees who are affected by workplace actions.

How Does a Business Receive Coverage?

Employment practices liability insurance is written on a claims-made basis, and you must report claims by a certain date if you expect to receive coverage. Any events that led to the claim must have also occurred on or after a specific date. There are services available to businesses that allow them to report earlier claims, but you will need to contact your insurance agency to see if these options are available to you. If a lawsuit is brought against your business, employment practices liability insurance can cover any defense or settlement costs that arise. Do not let your business remain vulnerable. Contact an insurance agency and secure protection.


photo credit: danielmoyle cc
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