What Is Employment Practices Liability Insurance (EPLI)?

As a business owner, your responsibilities are countless. Ensuring workplace safety is among your top priorities because employment claims can put your company at risk for employee lawsuits. The Equal Employment Opportunity Commission (EEOC) has reported a 20% increase in employee filings against employers over the last 10 years with the average settlement at almost $70,000. That is a serious risk that can lead to high legal expenses and big payouts business owners cannot ignore. Employment Practices Liability Insurance (EPLI) provides risk management tools and helps protect your business from employment claims. Learn more about EPLI and how it can help you keep your business running smoothly.

EPLI Policy Defined

EPLI is optional business insurance that can be added to a Farm Bureau BusinessMax policy and provides coverage to protect your business from employment claims. Legal claims against employers generally include discrimination, wrongful termination, harassment, wrongful hiring, and other issues. If you or your business becomes the subject of an employment claim, the costs can skyrocket quickly, and this coverage helps protect your business from the high cost of defending those claims.

What Does EPLI Cover?

Farm Bureau Employment practices liability insurance includes:

• Affordable premiums
• Coverage for businesses with up to 250 employees
• Optional coverage for claims brought by customers
• Specialized claims services
• Coverage for full prior acts

This add-on coverage also includes preventative resources to help you proactively prevent employment-related claims. Policyholders are given access to a website that is dedicated to helping business owners stay on top of employment liability issues. The preventative resources include a sample employee handbook, sample employment forms such as applications and evaluations, a web-based sexual harassment and discrimination training, a legal advice hotline and more.

What Does EPLI Not Cover?

There are specific instances that are not covered by EPLI and may require additional add-on insurance. This coverage includes worker’s compensation, property damage, employee theft, umbrella insurance and more.

Is EPLI Worth It for My Small Business?

While large corporations are typically well-prepared with substantial coverage for employment lawsuits, small businesses are particularly vulnerable to employment claims. According to the EEOC, more than 40% of EPLI claims are made against private employers with less than 100 employees. The size of the company does not matter — one lawsuit can put your business’ financial future at risk. Even if your company is not found at fault, there are substantial legal fees that must be paid to defend yourself and EPLI coverage can help you manage those expenses.

Here are examples of typical losses for business owners facing employment claims:

Food Services: A laid-off worker filed an age discrimination suit. It wasn’t true, so the owner assumed it would not be a big deal. The owner had to pay $20,000 in legal expenses.

Tool Shop: A longtime employee filed suit for wrongful termination. The owner paid $25,000 in legal fees.

Downtown Restaurant: A customer accused a server of making racially derogatory remarks while he was dining. The claim adjuster determined the server was negligent and the claim was settled with the customer. This cost the owner $12,000 for the settlement and $4,000 in legal fees.

Protect Your Business

Building a business takes a lot of hard work and dedication. Not having EPLI coverage can increase your risks. EPLI offers coverage to protect your business from the high cost of defending claims. Learn more about EPLI coverage with Farm Bureau and talk to a Farm Bureau agent today about how you can add this coverage to your BusinessMax policy.