Employers Practice Liability Insurance Policies and Buy Employment Practices Liability Insurance

Buy Employment Practices Liability Insurance

Employers Practice Liability Insurance Policies

Negotiate to build a policy that offers comprehensive employers practice liability insurance policy. Small business owners should select a reasonably priced policy, then make appropriate modifications. This is standard operating practice for insurers, and it can help ensure that the business company is not left vulnerable to gaps in coverage. For instance, Weiss noted that “virtually all policies cover traditional wrongful employment practices liability insurance such as harassment, discrimination, and wrongful termination of employment.

Buying Employers Practices Liability Insurance Policies

However, employers practice law is rapidly evolving and the definition of ‘wrongful act’ in many policies has not kept pace with the creation or popularization of additional causes of action such as employers practice liability insurance claims alleging ‘negligent hiring, training, and supervision.”‘ Weiss also observed that many standard EPLI policies expressly disclaim coverage for punitive damages. But he added that determined business owners can often negotiate shortfalls in either wrongful-act definitions or punitive damages coverage without the payment of additional premiums.

Negotiate for control of legal decisions when employer liability insurance claims are filed. “Before you buy an employement practice liability insurance policy, make sure what rights to retain counsel that it gives you,” wrote Tim Bland in Memphis Business Journal. “Many employers practice liability insurance policies give the insurer’s company the right to designate counsel of its own choosing. In such cases, more often than not it will focus more on the costs of the attorney, rather than the quality of representation the attorney provides.” He also noted that some EPL policies require that the company consent to financial settlements that are approved by the insurer or forfeit their coverage. As a result, “your right to influence the selection of defense counsel and defense strategy should be clearly set forth in the policy.”

Losses in Employer’s Practice Liability Insurance Policy

Examine losses covered under the employer’s practice liability insurance policy. The majority of employment practices business insurance policies provide coverage of back pay, lost benefits, and legal fees. However, front pay, fines, penalties, punitive damages, and cost of accommodations and travel are often not covered. “Look carefully at what types of losses are covered,” counseled Bland. “An EPLI policy that looks cheap on the front end may end up costing dearly if it does not cover all losses you could face in a lawsuit.”

Another possible option for small businesses in need to buy EPL insurance policy is a Business Opportunity Plan (BOP). A BOP provides basic property coverage for computers and other office equipment, plus damage liability protection for work-related accidents. In some cases, buying PEO employment liability insurance coverage with BOP might also include business interruption coverage that will maintain the company’s income stream for up to a year if a catastrophe disrupts business. Many BOPs also offer optional coverage against power failures and mechanical breakdowns, employments liability for workplace practice (including discrimination, sexual harassment, and compliance with the Americans with Disabilities Act), professional liability protection, and other office personnel risks.

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