Why You Need Employment Practices Liability Insurance

Did you know that according to the U.S. Equal Employment Opportunity Commission, there were over 84,000 total lawsuits filed against employers in 2017 alone? Moreover, the EEOC reports that these types of lawsuits are on the rise. While this number may seem staggering, it’s not at all surprising in today’s increasingly litigious society — making it especially important for business owners to take the necessary precautions to protect themselves from these time consuming and costly lawsuits. Luckily, Employment Practices Liability Insurance (EPLI) is available to help.

Employment lawsuits and complaints often stem from a range of issues including discrimination based on race, sex, or disability, retaliation, and sexual harassment. While most business insurance policies do not cover employment suits, EPLI can protect you from the financial consequences of an employment lawsuit, including coverage for defense costs. It can also protect you from administrative actions filed for wrongful discharge, defamation, and invasion of privacy.

You may be thinking that employee claims and lawsuits only happen to large companies and corporations. But no company is immune to lawsuits — not even small businesses. Roughly ⅓ of recent charges have been made against small businesses. Companies with even one employee may be subject to liability under some federal and state laws. Here is a partial listing of applicable statutes for businesses of all sizes:

Federal and Massachusetts Laws (Partial Listing)
# of Employees Applicable Statute
1 or more
  • Equal Pay Act
  • MA Fair Employment Practices Act
  • MA Employment Pay Equity Act
  • MA Civil Rights Act
15 or more
  • Americans with Disabilities Act (ADA)
  • Pregnancy Discrimination Act (PDA)
  • Title VII of Civil Rights Act
20 or more
  • Age Discrimination in Employment Act (ADEA)
50 or more
  • Family and Medical Leave Act (FMLA)

Beyond getting an EPLI policy, here are a few ways you can reduce employment practices liability risks at your company:

  • Create effective and inclusive screening programs to avoid discrimination in hiring.
  • Make sure your employment applications include an equal employment opportunity statement.
  • Create job descriptions for each position that clearly defines expectations, responsibilities, and performance requirements.
  • Create corporate policies and place them in employee handbooks that are accessible to all employees. Train employees on these policies during their orientation and regularly train and update employees on the rules throughout the year.
  • Inform employees on how they can report situations of harassment or misconduct to their managers or the human resources department. Train managers and supervisors on how to properly handle and escalate these reports.
  • Document everything that occurs in the case of a complaint and the steps the company will take to resolve the issue.
  • Institute a zero tolerance policy regarding discrimination and harassment in the workplace.

In addition to responding to charges of discrimination, harassment, and other employer misconduct, EPLI coverage through Quincy Mutual Group also offers free resources to help with the day-to-day employment issues you may face.

If you want to learn more about Employment Practices Liability Insurance, or if you want to discuss the kinds of claims that your company could experience in more detail, we work with over 500 independent insurance agents who are ready to help! Visit our website to connect with a local agent near you:bit.ly/QuincyFindAgent.

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